I spoke with attorney Bill Scherer, who is representing about $100 million in alleged Rothstein Ponzi losses, and asked him where he thought Rothstein's stolen money had gone.
"It think it's mostly in the clawbacks," he told me.
Clawbacks. You're going to hear a lot about clawbacks in the coming months. Investopedia defines the term as "previously given monies or benefits that are taken back due to specially arising circumstances." In this case, the specially arising circumstance is that the monies Rothstein dispersed were stolen.
Of course, the Rothstein receivership and the alleged victims of the Ponzi scheme will go after all the charities, businesses, properties, etc. in which Rothstein put the stolen money. And they will try to claw all that cash back.
We know about most of those entities -- businesses like Qtask, V Giorgio, Renato Watches, the Versace mansion, Cafe Iguana, and a slew of others -- but some will trickle out over time. Like the Palm Beach International Raceway. One Rothstein bankruptcy committee member told me that Rothstein invested a sizable sum of money into
PBIR, which used to be called the Moroso Motorsports Park. I have a call in to Raceway CEO Jason Rittenberry to get answers and will report back when I get more information.
Some names on the potential clawback list might suprise you. Take Ted Morse, for example. We all know that Morse bankrolled Rothstein at the beginning of this mess and that Rothstein swindled the Morse family out of $57 million. But that money came from Morse's father, Ed, who is a definite loser.
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Ted Morse, however, probably doesn't fall into the same category. He is very likely what is called a "net winner" -- someone who returned more money from investments in the Ponzi scheme than what he may have lost. Ted Morse was reportedly Rothstein's very first investor in the settlement scam. "I hear that Ted Morse is concerned about a very serious clawback problem," said one source close to the bankruptcy. Again, I have a call into Morse attorney Ed Pozzuoli and will report back when/if I hear from him.
Another suspected net winner is George Levin. I've called Levin the whale, but several well-placed sources are wondering if he may not have been the maestro of the thing. Levin's business history, as has been reported, is spotty at best, with a fraud charge, a right-hand man (Frank Preve) with a felony conviction, and serious questions about other ventures (including First Chesapeake). Levin's Banyon hedge fund claims to be out $775 million, including profits, but the bulk of that money came from other people. Levin personally is said to have plunked in about $125 million. The question: Did he get more than that out over the life of the Ponzi?
I've contacted a member of Levin's camp for comment, but I can already tell you what that answer will be: Absolutely not. They will say that Levin is the hardest-hit victim of all and that he had no knowledge that it was a Ponzi.
It's going to take the forensics guys to decide who is right.