Love Blooms "Despite" Rothstein Fallout
You might think there aren't any positive stories coming out of the Scott Rothstein debacle, but then you'd be wrong.
Over the holidays, Barry Bekkedam, who fed $100 million into Rothstein's Ponzi scheme through his money management fund, was engaged to local real estate agent and insurance broker Diane Barnett, who also has ties to a couple of Rothstein's former interests.
I contacted Barnett on the phone, and she rather reluctantly confirmed the engagement.
So does that mean that love bloomed from out of the Rothstein debacle?
UberTAILGATE: Hard Rock Stadium Dolphins vs. Cardinals
TicketsSun., Dec. 11, 12:00pm
LUXURY SEATING: Miami Dolphins v Arizona Cardinals
TicketsSun., Dec. 11, 1:00pm
Miami Dolphins vs. Arizona Cardinals
TicketsSun., Dec. 11, 1:00pm
Fight Time PRO MMA
TicketsFri., Dec. 16, 8:00pm
"I would say our love was blooming before this mess," said Barnett, who was formerly married to music promoter Dan Barnett. "I would say our love bloomed despite Scott Rothstein. The Scott Rothstein cloud is
not part of my relationship."
Barnett moved in Rothstein's social circle before the fall and is connected to two of his interests: She has done work for health care consulting firm Edify, which Rothstein co-owned, and serves as a member of the advisory board for Broward Bank of Commerce, in which Rothstein invested.
At the same time, her fiance, Bekkedam, was an integral "feeder" to Rothstein's investment scheme. His Pennsylvania-based hedge fund, Ballamor Capital Investment, lost $30 million in the Rothstein scheme, according to court documents. In a video shot in May at a financial conference in Las Vegas, Bekkedam said he steered $100 million in his investors' money -- which he said came from the "ultra-high net worth world" -- to Rothstein's scheme. He put the money in through George Levin and Banyon, and one of his clients was wealthy Fort Lauderdale businessman Doug Von Allmen, who put a total of $100 million, some of it through Ballamor and some of it directly. Here's what Bekkedam says on the videotape:
We found an area in legal settlements which we recently funded for $100 million, and the principal [George Levin] who was a business owner already had a half-billion dollars of his own capital in this particular fund. It wasn't a fund; it was a business, doing extremely well. Believe it or not, we negotiated the first $100 million of outside money to go in. We're getting a 15 percent current cash return and a clawback personal guarantee on the part of the general partner, who has a half-billion of his own money in the fund. How is that possible? How can you get that return? Literally he didn't even understand that the fund structure was out there. We put him in the fund business basically. And the fund has no fee.
Interestingly, at the same time that Bekkedam was putting money into Rothstein's scheme through Levin, Levin was investing in Bekkedam's business and a bank at Bekkedam's recommendation, according to the Philadelphia Inquirer. From that article:
How did the smart guys who run Ballamor, who include CEO Barry Bekkedam, a former Villanova basketball player who spends a lot of time in South Florida, end up putting their clients' money, partly through Banyon, into the same Ponzi scheme?
Maybe they convinced each other.
They certainly worked closely together: Earlier this year, Banyon's Levin helped finance $1.8 billion Ballamor's expansion, while Ballamor's Bekkedam urged clients to invest with Banyon.
"Ballamor needed some capital to expand our business. George agreed to provide us with capital," Ballamor's Rovin told me. "He made a $1 million investment," at market rates.
"Similarly," Rovin continued, "a number of our clients are investors in Nova Bank," of Berwyn. Nova wanted to raise capital, Bekkedam recommended the bank to Levin, and "George made a $5 million investment."
Brian Hartline, chief executive at Nova, confirmed to me that Levin had invested $5 million in the bank, and had regulators' approval to invest more. "But unfortunately he fell victim to the [Rothstein] scheme and was unable to fulfill it," Hartline said.
According to the Florida investors' civil suit against Rothstein, Levin's payments to Bekkedam and his Radnor firm amounted to payment "for their [Bekkedam's and Ballamor's] involvement in this Ponzi scheme."
But Ballamor's Rovin says the Nova and Ballamor investments "were not linked" to Bekkedam's endorsement of Levin's fund. "There was no quid pro quo."
What, then, did Bekkedam and his firm get from guiding investors to Levin's Banyon fund, and the Rothstein fiasco?
"We were paid strictly on the basis of our regular management fees," said Rovin. Those run "around 1 percent a year."
Interesting relationship, but there's no evidence that Bekkedam knew he was dealing with a Ponzi scheme (Barnett said neither of them had any idea Rothstein was running a fraud).
Several sources say that Bekkedam, at the behest of Von Allmen, went to Fort Lauderdale Executive Airport to intercept Rothstein when the con man made his return from Morocco in early November. One source says that Bekkedam yelled to Rothstein while he unloaded a multitude of bags, "Where's the money?"
"What do you think I got all the luggage for?" Rothstein is said to have replied with a laugh.
-- In other news, I was told by two nonnewspaper sources today that the Sun-Sentinel had a meeting today announcing that there will be ten more layoffs in the coming weeks. The pain keeps on coming in the newspaper industry.
-- There are also indications that Sheriff Al Lamberti is holding strong behind Undersheriff Tom Wheeler, despite the report yesterday to the contrary. We'll see how that shakes out.
Get the ICYMI: Today's Top Stories Newsletter Our daily newsletter delivers quick clicks to keep you in the know
Catch up on the day's news and stay informed with our daily digest of the most popular news, music, food and arts stories in Broward / Palm Beach, delivered to your inbox Monday through Friday.