Large Rothstein Investor Breaks Silence
It's been a question that has dogged Scott Rothstein for the past couple of years: Where is the money coming from that he's spending all over town?
The answers are coming slowly, and they point to the fact that a great deal of the money came from his friends and neighbors. The Morse car dealership family, for instance, which reportedly invested tens of millions. Then there's Fort Lauderdale socialite Bonnie Barnett, who was tied to the last big lawyer who imploded in Fort Lauderdale, Elliott Barnett. And now we have Doug Von Allmen, a vastly wealthy venture capitalist and Republican campaign donor who has made a home in Fort Lauderdale and was a neighbor of Rothstein's on Isla Bahia Drive on the Intracoastal.
I spoke with Von Allmen, who is (ironically in light of recent events) the namesake for the University of Kentucky's Doug J. Von Allmen School of Accountancy, on the phone this morning, and he confirmed that he and family members invested money in an entity that in turn put it into Rothstein's Ponzi scheme. He said he learned "something was wrong" on Friday evening but he wouldn't say how much money he put in, only clarifying that it was under $100 million. Current estimates indicate total losses surpass $400 million in Rothstein's unregulated scheme, which promised rates of return as high as 36 percent.
"I've heard a lot of things about my name being bantered around as an investor," Von Allmen told me. "I invested with someone else that put money in there with Scott. I don't know what he did. The amount of money was substantial. It was an amount I wish I'd
given to charity instead of that investment. It won't change my lifestyle that much, but it was a nice sum. ... I will still eat out at a restaurant every night, this is just something I need to get through."
I asked him if he put the money in Banyan, a fund the Sun-Sentinel reported today sank $300 million in the Rothstein scheme.
Von Allmen, who also founded Beauty Alliance, one of the largest chains of beauty schools in the country, said he has contacted downtown attorney Bill Scherer to represent him, though he hasn't been officially hired. Scherer has attended court hearings on the Rothstein matter and has said he represents clients who put $72 million into the Rothstein scheme.
He said he socialized with Rothstein on several occasions and said that the fact that Rothstein was spending huge amounts of money on cars, property, charity, and businesses didn't concern him that much.
"People have a lot of cars; I have a lot of cars," said Von Allmen, who owns two yachts called The Lady Linda and Linda Lou, which is named for his wife. "I heard he was investing with partners. What does that mean?"
He said he paid no attention to the rumors about Rothstein during recent months and avoids all news.
"I don't subscribe to a newspaper, and I turn off the TV when the news comes on," Von Allmen told me. "I never listen to the radio in the car. I got very, very depressed back in the Carter administration time, when the whole world was going to be just terrible, and I reflected back to my teenage years. I grew up in the '50s when any minute, Russia was going to destroy us. When a news show came on, I turned to a rock 'n' roll station. I try to stay away from news."
As for Rothstein himself, Von Allmen said he believed Rothstein had created a "persona" and that underneath that image he was an "average Joe."
"Quite honestly, this persona of his, it totally went away when he was around less than four people," Von Allmen said. "I was around him a couple of times where it was four people or less, and my feeling was that it was almost something that had been developed by him to scare the other side in lawsuits. It was like, 'I'm dealing with a crazy man here, I better settle as soon as I can.' And I thought it carried over to his other businesses.
"But if you just sat with him with less than four people, you thought he was an average Joe. He was solid, he was nice, he explained things in a calm rational manner. But when he got around four people or more, all the sudden he was very animated and bigger than life."
Von Allmen, a member of the Coral Ridge Yacht Club and inductee of the Nova Southeastern University Hall of Fame, was also involved in charity events with Rothstein, including one connected to the Humane Society of Broward County. Von Allmen counts among his friends Wayne Huizenga, car dealer Rick Case, and Austin Forman.
I asked Von Allmen if he hated Rothstein after this loss, and he said no, that he puts it on himself for allowing what now appears to be an outlandish investment when he should have known better.
"In everything I've ever done in my life, when I feel someone has taken advantage of me, I always think, 'Gee, Doug, you screwed up. How did you let that happen?' "
Get the Things to Do Newsletter
Find out about upcoming events and special offers happening in South Florida.