Articles Posted in Wire Fraud, Mail Fraud

After more than six hours of compelling testimony by convicted and jailed Ponzi swindler Scott Rothstein, a West Palm Beach, Florida federal jury took one third the time of his testimony to find his associate Christina Kitterman, 39, guilty of all three counts of wire fraud brought against her by the U.S. Attorney.

Kitterman, of Deerfield Beach, also an attorney, as was Rothstein, still operates her practice in Boca Raton. She was arrested in August of last year along with Douglas L. Bates, 54, of Parkland, another attorney that had dealings with Rothstein’s firm.

At her arraignment in September, Kitterman pleaded not guilty to the three counts in front of U.S. Magistrate Judge James M. Hopkins. Each of the charges carried a maximum of twenty-years in prison and fines of $250,000.00.

Based on the indictment, in April 2009, Kitterman read a pre-scripted document in the course of a telephone conference with victims of Rothstein’s scam while she was an employee of Rothstein, Rosenfeldt and Adler P.A. (RRA) a law firm with offices in Boca Raton, Fort Lauderdale, Miami, West Palm Beach, Tallahassee, Florida, New York and Caracas, Venezuela. During its heyday, RRA boasted a staff of 150 and 70 lawyers in their employ.

In the course of the conversation, she informed the edgy individuals that a number of the company’s bank accounts had been frozen because Rothstein faced disciplinary action pending a Bar investigation of his firm. She did so under the ruse that she was the head of the Florida Bar’s Fort Lauderdale office, creating the falsehood in explanation of why certain payments due to the listening investors had not yet been paid out.

According to her testimony, Kitterman indicated that she was under the impression that she was speaking with individuals who had refused to make payments of settlements. She also later testified that she was a victim of sexual harassment by Rothstein on several occasions during her employment with his firm.

Rothstein had a dissimilar story to articulate.

During court testimony he contradicted her suggestion by alleging that he had a consensual sexual relationship with her while she was in his employ. Further, while being questioned, Rothstein stated that he wished he didn’t have to testify about Ms. Kitterman and said “I am not happy about being here,” adding that he considered her a “close, trusted friend,” apparently in addition to the indicated sexual exploits. But he accentuated the sexual component by saying “We were two friends who fooled around from time to time,” Once at Runway 84 in Fort Lauderdale she “pulled me into a bathroom stall to make out with me.” He continued by saying that “I loved her and cared about her and I believe she loved and cared about me.”

But additional testimony provided by Rothstein which was heard by the jury was more incriminatory.

Dressed casually and much slimmer than his last public appearance, Rothstein delivered a rambling soliloquy of the Ponzi scheme he engineered and organized while on the witness stand. He voiced to a packed courtroom about his connections with corrupt law enforcement officials and politicians, sexual escapades including stories about cheating on his wife, and involvement with the Mafia.

Called as a witness for the defense in this case, his testimony apparently only aided the prosecution. The handcuffed clad convict took the witness stand with his customary loose lips recounting stories of his dealings and connections with Ms. Kitterman. Rothstein became well-known for “singing like a canary”, implicating everyone from his partners in the scheme as well as bankers lawyers, a company CEO and even an owner of a car dealership during criminal proceedings against him which ultimately led to his conviction of Florida’s largest Ponzi scheme and the fourth largest in US history ever to be executed.
In this latest testimony Rothstein portrayed Kitterman as a “team player” who had no reservations about assisting him with the offenses she’d been charged with. He went on to accuse her of committing a number of additional crimes. “I did for her, she did for me,” he explained. He further stated that their association was one of each having the other’s back and doing whatever needed to be done whether it was above-board or not. He further stated “I did not tell her we were going to cheat anyone, I just told her to lie.”

Kitterman’s defense attorney angrily charged that Rothstein was lying in a selfish attempt to get his sentenced reduced by cooperating with the prosecution in his client’s case.

But Rothstein contended that it would be “self-destructive” for him to lie about matters that could easily be disproved by documented evidence. He also noted that he believed doing so would extinguish any remaining hope he has of ever being freed from prison.

The now jailed, disgraced, and disbarred attorney is in the midst of serving a 50-year prison sentence for his conviction of being the mastermind of the $1.2 billion Ponzi scheme. During his own trial, he apologized to all that were hurt by his actions and also implicated many, if not all of his associates that were connected to the scheme. To date, fourteen individuals have been convicted and sent to federal prison for crimes linked to him and Kitterman is the eighteenth individual who’s faced charges associated to his exploits.
U.S. District Judge Daniel T.K. Hurley didn’t fix a sentencing date based on reasoning that he would review trial transcripts to first determine if Kitterman perjured herself during her testimony. That possibility, if deemed to be valid by the judge could have weight on the overall span of her sentence.

To read more on the topic of wire fraud visit my website or click here to go directly to the page that explains the crime in detail.

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In 2007 the housing market in Florida was booming. Many individuals were buying properties, fixing them up and reselling them for quick profits. At the time some believed that housing values would only continue to rise. This practice known as flipping became one of the major factors causing the impending economic recession that arose in the following year.

Houses were greatly inflated in value and when housing prices made a U-turn and quickly went down thousands of individuals found that they were under water, the worth of their properties now significantly lower than what they paid for them.

The practice of flipping is not an illegal act in itself but in some cases fraudulent practicing of these techniques occurred.

Four men, Michael Chadwick, Matthew Landsman, Joshua Unger and J. Patrick Brester, devised a scheme to defraud lending institutions by leading them to believe that housing prices of properties bought by Brester’s shell corporations, and to be financed through the other co-conspirators were worth a substantial amount more than the rate that they were actually purchased at.

All of the fraudulent transactions included Brester, primarily buying condominium units by way of shell development companies and then simultaneously “flipping” them to Michael Chadwick. To expedite the scheme, Brester and his co-conspirators misled mortgage bankers in reference to the true nature of the deals. They overstated the purchase prices of the properties and, in due course, the amount lent by the mortgage lenders to them. Their method of doing so was by including monetary charges that were falsely described as “management fees”. The fees were made payable to the shell corporations which they controlled. The management fees were actually the method by which Brester and his co-conspirators directed monies back to themselves without the banks gaining knowledge.

In Brester’s trial the evidence and testimony demonstrated that Brester and his accomplices produced interstate wire transfers of the loan’s profits from the victim lenders that were transferred into bank accounts maintained by the shell companies, comprising Landwick I LLC and IGS Inc. Proof was offered at trial that exhibited that Brester turned a profit of more than $550,000 from his part in the scheme. Brester received the majority of the proceeds of the illicit transactions. The amount of money that the mortgage companies lost exceeded $1.3 million.

Chadwick, Landsman, and Unger had already been convicted of the scheme but Brester, 40, of Sarasota, Florida who was characterized as the middleman, had not been indicted until August of last year.

Chadwick has already completed a one-year prison sentence and Unger had been sentenced to 41 months in prison. Although Unger’s attorney vehemently stated that Unger only played a minor role in the flipping scheme it is believed that the Judge dispensed such a harsh sentence because of his prior criminal record. Unger had been previously convicted of three DUI violations, issuing bad checks, and using a fellow volunteer’s credit card from a charity he was a part of in excess of $12,000.00. However, the sentencing judge reserved the right to minimize Unger’s sentence if he agreed to testify against J. Patrick Brester, the final co-conspirator of the wire fraud offense.

Landsman was also convicted and is still serving a two-year prison sentence that began in late 2011. The three men all pleaded guilty to conspiring to commit wire and mail fraud in an arrangement that involved purchasing and instantaneously reselling the condominiums which were located in Sarasota’s Vintage Grand complex at inflated rates. The objective was to profit from the sales by fraudulent means using the quantity of the money the co-conspirators would be able to borrow from banks and subsequently the amount they could receive in what were deemed incentives, commissions and fees, from Brester’s shell corporations that was fleetingly the original owner.

Earlier this month, it was announced by U. S. Attorney Robert E. O’Neill that Brester was found guilty by a federal jury of one count of conspiracy to commit wire fraud affecting a financial institution as well as three counts of wire fraud affecting a financial institution.

Each of the counts carries a penalty of up to one million in fines and a maximum of thirty years in federal prison.

The complete FBI press release can be read by clicking here.

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