Florida Lawfirn Fraud Investigation

As an accountant/auditing student, I find it interesting to investigate the different ways that fraud is perpetrated. There is a current investigation in Florida of a law firm which is suspected of operating a massive fraud scheme with regards to investments in legal settlements that have been faked.
On Tuesday November 3 the Ft. Lauderdale firm , Rothstein Rosenfeldt Adler had federal agents seizing boxes of records, computers and bank rcords during an all night search. Scott Rothstein is suspected of operating an investment business along with his legal services wherein they purchase the lump sum of a legal settlement at a discount, and then receive the regular payments at a 20-30% profit. There is also concern that the lawsuits where faked.

It is reported that nearby competitors and associates became suspicious af the amount of money that appeared to be earned and spent at this particular firm which did not seem to be feasible, including a jet owned by the firm. Recently Mr. Rothstein was removed as chief executive officer of the firm by a judge. A "reviewer" was appointed to determine the disposition of the firm's transactions, and a lawsuit has been filed by investors claiming to have lost as estimated $80 million.

Both Democratic and Republican parties have returned tens of thousands of dollars of donation money in an effort to distance themselves from Mr. Rothstein, and Governor Charlie Crist is giving back $9600 from a senate campaign.

The auditing and investigative results involving the financials and the legality will be interesting to follow. I am aware of the effect of Sarbaynes Oxley on the accounting profession, but I am not yet informed about the legal profession equivilant of regulating and accountability restrictions.