Eight years after it began, the dust is finally settling on the Scott Rothstein Ponzi scheme that rocked Fort Lauderdale. In December, TD Bank executive Frank Spinosa, the final defendant, was sentenced to 30 months in prison after pleading guilty to conspiring to commit wire fraud.
One key player, Ovadia Levy, has never been charged but says still that Scott Rothstein ruined his life.
He says the pair met when Levy was 25, rich, and partying too hard. He says Rothstein took advantage of him, pretended to be his best friend, weaseled his way into Levy’s multimillion-dollar watch-making business, and infected it with his “dirty money.” And, he says when Rothstein’s billion-dollar, fraudulent empire crumbled, he got dragged down to the bottom.
Levy — he goes by “Ovi” — says this all from an immaculate, glimmering mansion in Naples, Florida, with heavy, wrought-iron doors that seem to stretch 20 feet into the air and a backyard that butts up against a golf course. From his back porch, the course’s tiny hills seem to bob up and down in the breeze, cascading down toward the edge of Levy’s property. Every half hour or so, a golf cart whizzes by. A pearl-colored convertible Bentley sits parked in the driveway.
“I’m happy here,” he says. He’s short and somewhat sunburnt, with round cheeks and stocky limbs. His hair and beard are buzzed close, to an equal length, and words tend to burst from his mouth in rapid-fire cadences. “I had to move all the way over here just to get away from everything. I just got in a car, a U-Haul, and started fresh.”
Despite the fact that Levy, now 39, was never charged with a crime during the Rothstein affair, people suggested that he may have known about the scheme, as he appeared to have been Rothstein’s closest friend. Rothstein often referred to Levy as his “little brother.” Some media accounts accused Levy of being tied to Israeli crime lords. Levy claims, flatly, that this was all incorrect. He points out that eight years after Rothstein’s downfall, roughly 30 people have been sentenced to jail for their cooperation in the scheme, but Levy was not one of them. Rothstein, Levy says, simply gained his confidence, bilked him out of millions, and ruined his name in Broward County.
Executing a Ponzi scheme requires supernatural levels of charisma and a psychopathic ability to lie one's way out of nearly any situation. In essence, scheme operators convince financiers to spend money on some sort of too-good-to-be-true investment, when, in reality, said investments don’t exist. Whoever runs the scheme simply pays off the last investor with money from new investors, and the whole operation snowballs in size. The trick is simply keeping investors in the dark as long as possible.
Rothstein, a former lawyer at the now-defunct Fort Lauderdale law firm Rothstein Rosenfeld Adler, tricked people into believing he was making giant profits via “structured settlements,” in which investors “purchase” legal settlements from people willing to trade their weekly or yearly payments for an upfront cash sum.
At his peak, Rothstein was a larger-than-life personality with a taste for fast cars and celebrity — he once flew Bill Clinton, Kevin Spacey, and Chris Tucker to Africa on an “anti-AIDS mission.” He seems, in hindsight, like the perfect person to run a white-collar criminal enterprise. By the time he was outed in 2009, his scheme had brought in $1.2 billion.
While Rothstein himself sits in the witness protection program in an undisclosed American prison, sentenced to 50 years, many of the lives he touched were also damaged. His ex-wife, Kim, in 2013 pleaded guilty to one charge of conspiracy to commit money laundering. After serving 18 months in jail, she was placed in a halfway house in January 2015. Rothstein's law partner Russell Adler pleaded guilty in 2014 to making illegal campaign contributions on Rothstein’s behalf; he was reportedly released from prison to a halfway house in December and now works as a paralegal. Stuart Rosenfeldt, his other law partner, also pleaded guilty to conspiring to commit campaign finance fraud. He was sentenced to 33 months in prison in October 2014. Debra Villegas, Rothstein’s “right-hand woman,” was sentenced to ten years in jail after pleading guilty to money-laundering charges. After she provided key testimony against a host of other defendants, she was released from prison in December 2014. Her ex-husband, Tony Villegas, stands accused of killing a separate Rothstein law partner but has been deemed mentally unfit to stand trial. The list goes on.
Ovi Levy says he, however, was a victim.
Levy, born in Israel to wealthy hotel owner Shimon Levy, moved to New York City with his parents when he was 4 years old and eventually moved to Hollywood, Florida, at age 8. After being bullied as a kid, he says, he grew into an athlete, started meeting girls, and realized he wanted to get into
After leaving school, he started a few companies almost immediately, he says. The first, called Nationwide Auto Leasing, gave car loans to people with “B” and “C” credit ratings.
Years later, he founded a company called EZ Light Distribution and began importing miscellaneous goods from China to sell to American retail chains like Loews and Costco. “I would live in Shenzhen or Guangdong for three months at a time and then come back to America,” he says. “I would sleep in the factories. And some of them made watches. At one point, I saw a sample of an unbranded watch and thought, ‘This is such a sick watch!’” The watch was thick and clunky, with a round face and only the numbers “12” and “8” inscribed inside.
Levy, along with his business partner and brother-in-law Daniel Mink, started selling the watch on a litany of home-shopping channels. “We sold 300,000 units in the first year,” he says. “We were on ShopNBC, HSN, Amazon, Overstock, you name it.” The pair eventually founded a company, Renato Watches, in 2006. “We made a killing in 2006, 2007, 2008.” He said that at the company’s peak, Renato was pulling in $40 million to $50 million a year in gross revenue.
“But so much success at a young age, it really got to me,” Levy says. “I was 25 years old, decent-looking, drinking, hanging out at bars. I bought cars, Lamborghinis, Ferraris.” He was arrested for driving under the influence in 2007. But in the rare instances when he found himself alone, he felt empty inside. “I thought I was invincible,” Levy said. “I needed guidance.”
So Levy turned to religion and began attending synagogue regularly at the Downtown Jewish Center Chabad, which, at the time, didn’t have a building. “I became friendly with a rabbi, Rabbi Schneur Kaplan,” he says. While spending time at the synagogue, Levy started chatting regularly with a man about ten years older than him. Levy noticed they both owned the same Ferrari in different colors.
“I met Scott through a rabbi, for God’s sakes,” he says, shaking his head.
It didn’t take long for Rothstein to start pumping money into Renato Watches. “I was a nice piece of prey for him,” Levy says. “I never had a brother. I have two sisters, but we’re not in touch. Scott became like a big brother, an uncle for me. He reminded me of my grandfather. I idolized him. And I envied him.” He says Rothstein routinely took him out to dinners and parties throughout Broward County. The pair was spotted, often, at the Fort Lauderdale steakhouse Bova Prime, which Rothstein also owned a stake in.
Eventually, Rothstein “asked me if he could be my partner” in Renato, Levy says. “And I very much wanted him to. He’s hanging out with Schwarzenegger, Charlie Crist, Bush — who doesn’t want to be a part of that? It turns out, he was funneling his dirty, disgusting money into my business.”
According to a deposition Rothstein gave on June 20, 2012, Rothstein said he wanted to invest in Renato to help make his own businesses seem more legitimate. In that same deposition, Rothstein said both Levy and his father, Shimon, who owns Fort Lauderdale’s Sea Club Resort, invested heavily in Rothstein’s fraudulent settlements. Rothstein paid the family millions. At one point, Rothstein said in court, Levy allegedly asked if his family was participating in a Ponzi scheme, but Rothstein said he laughed off the accusation.
Levy, who says Rothstein’s entire deposition was “all lies,” tells New Times he cannot recall ever asking Rothstein if he was running any sort of scheme.
“You have to remember, this guy was like a brother to me,” Levy says. “Imagine if your brother came to you and said, ‘I see you’re not doing too well — I can help you with some investments’ and then made the rest up.” According to court records, the entire Levy family was sinking millions into Rothstein’s scheme, allegedly unaware of any wrongdoing on Rothstein’s part.
In that same deposition, Rothstein said that, due to his closeness with Levy, he was “very, let's say, conscientious in making sure that the
As the pair began to get closer, Levy, who was in his late 20s at the time, received some startling news: He’d been diagnosed with stage-3 testicular cancer. “It was exactly what Lance Armstrong had,” he says. “We had the same doctor.”
As Levy underwent chemo and dwindled away, Rothstein visited him in the hospital almost every day. “He would bring me bagels,” Levy says. “He would pet my head, call me beautiful, call me his brother, tell me I’m going to be 100 percent soon.” All the while, Rothstein continually brought Levy paperwork to sign. “I had chemo-brain and was not functioning, and here this guy is handing me documents,” Levy says, claiming that most of the time, he had no idea what he was signing from his hospital bed.
After four months of treatment, Levy felt he had beaten
“And then a month after that, he disappears, and the story breaks loose,” Levy says. Rothstein, Levy claims, had been lying to him the entire time.
“I felt like the biggest loser ever,” Levy says. “When somebody so close to you, who says he loves you so much, does something like this, you just feel suicidal.”
After Rothstein was outed in October of 2009, he famously fled to Morocco, a country that lacks an extradition agreement with the United States. He brought a duffel bag with him, stuffed with enough cash to let him survive in the country indefinitely. But, weeks later, Rothstein had a change of heart and returned to the United States to turn himself in.
As Rothstein disappeared, so did Levy’s businesses. Rothstein’s stake in Renato, as well as the investments he’d made in Shimon Levy’s Sea Club Resort, became the property of the federal government.
According to court records, the Levy family had invested $50.6 million into Rothstein’s schemes, and Levy himself had invested around $12.6 million. At the time of Rothstein’s arrest, court filings showed the Levys had received roughly $49 million in return, posting a loss of about $1.6 million. After the bankruptcy trustee handling Rothstein’s case alleged the family owed some of that money back to the government, the trustee found that the family had actually lost closer to $5.5 million. The family paid $150,000 to settle with the government.
Rothstein, who would later say in court that he’d felt guilty for bilking Levy out of millions, initially lied to Levy, in an October 29, 2009, email, about why his investment empire was crumbling. Rothstein “had an idiot investor in Texas breach confidentiality and interfere with the settlements,” [sic] Rothstein wrote, according to court records. “I am repairing the mess. And I have more than enough money to cover u and ur dad. Ur my first prior[ity].”
But three days later, Rothstein began to tell the family the truth. “I am a thief and a liar and a scumbag,” Rothstein wrote to the
Rothstein received a message from Levy’s phone two days later. “Our love for u still exists however we are all in a panic over this and will need to liquidate because we put everything we had in you EVERYTHING,” it said.
Still, rumors swirled that the Levy family was not completely innocent — that they were tied to Israeli crime lords, as Shimon Levy once spent time in Israeli prison for allegedly harboring two criminals wanted for murder. Additionally, the elder Levy’s former business partner, Zvika
But the younger Levy claims his father’s “Mob ties” were overblown, if not fabricated outright. He says his father’s criminal record was "expunged" in Israel. (The Herald has reported that it was “ordered destroyed” for “unexplained reasons.”)
After the fallout, Levy says he checked himself into a 60-day rehab facility. “I had to start fresh,” he says. “My name was totally tarnished. I couldn’t even open up a bank account. BB&T dropped me. SunTrust dropped me. Bank of America dropped me.” He says he felt trapped inside his own home.
He’d grown heavy, he says, and his skin looked red and unhealthy. His blood pressure was dangerously high. “So I decided to unplug and just play tennis,” he says. For the next two years, he turned his brain off.
Despite losing “everything” to Rothstein, Levy — now married with a young son — lives in a home with a turret poking through the roof. His living-room television is so state-of-the-art, it curves inward, like a sail catching the wind. He has another flat screen mounted in view of his pool out back. It seems hard to feel anything but peace here, but that’s sort of the point. He no longer drinks and says he's focused on just being a dad and a husband.
Since moving to Naples, Levy has reinvented himself managing hedge funds. Through a company he now owns, called KPL Capital Investments, he manages the wealth of “four or five wealthy families,” whom he would not name.
He’s also taken to blogging regularly about the stock market at ovadialevy.tumblr.com and has developed something of a reputation as a Wall Street wiz. After blogging for months that “FANG” — stock market slang for the combined stocks of Facebook, Amazon, Netflix, and Google — was set for a massive value loss, publications like The Street and Seeking Alpha started calling Levy in droves when Netflix’s stock prospects actually began to look shaky in December.
He says he sees another recession looming on the horizon, “like the
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