Attorney
is the Ninth Person to Plead Guilty to Criminal Charges
Wifredo A. Ferrer, United States
Attorney for the Southern District of Florida; John V. Gillies, Special Agent
in Charge, Federal Bureau of Investigation (FBI), Miami Field Office; and José
A. Gonzalez, Special Agent in Charge, Internal Revenue Service, Criminal
Investigation Division (IRS-CID), announced that Steven N. Lippman, 50, of
Plantation, pled guilty today to conspiring to commit crimes through the
operation of the former Ft. Lauderdale law firm of Scott W. Rothstein, called
Rothstein, Rosenfeldt, and Adler, P.A. (RRA). The defendant was an attorney
admitted to practice law in Florida and, in early 2005, was designated as a
Shareholder of RRA but had no equity interest in the firm.
The one-count information to which
Lippman pled guilty charged him with conspiracy to violate the Federal Election
Campaign Act, to defraud the United States, and to defraud a financial
institution, in violation of 18 U.S.C. §371. The defendant faces a maximum
statutory sentence of up to five years in prison. Sentencing has been scheduled
for September 14, 2012 at 9:00 a.m. before United States District Judge James
I. Cohn in Ft. Lauderdale.
According to the stipulated statement of
facts filed in court today, Lippman violated the Federal Election Campaign Act
in that he was unlawfully reimbursed by RRA for certain contributions that he
made to the presidential campaign of John McCain. More specifically, the factual
stipulation states that co-conspirator Rothstein and others, including
defendant Lippman, attempted to dramatically increase the stature and political
power of RRA on the federal, state, and local levels by making substantial
political contributions to political candidates. However, since many of the
attorneys and administrative personnel of RRA either had insufficient funds to
contribute to the political campaigns and/or lacked the desire to contribute to
the various political candidates selected by Rothstein, co-conspirator
Rothstein enlisted Lippman and others to contribute to the McCain campaign by
agreeing that RRA unlawfully would provide them with the funds to make the
political contributions. For example, in one instance, Lippman made a $67,800
contribution to McCain-Palin Victory 2008. Lippman, in turn, received a check
from RRA in the amount of $77,500, which constituted reimbursement of the funds
he used to make the contribution. The check was fraudulently backdated to
reflect that it was issued six days prior to the date of the actual
contribution and the memo section of the check stated “bonus.”
The factual stipulation also states that
Lippman engaged in a bank fraud scheme with Rothstein. According to the
stipulation, RRA was experiencing financial difficulties and required a source
of funds to maintain the law firm’s operations. Lippman maintained a bank
account from a prior law firm where he had been a partner (the LVS account).
Around February 2006, co-conspirator Rothstein requested that Lippman use the
LVS account to float checks between and among certain bank accounts maintained
by RRA, a practice commonly known as “check kiting.” By simultaneously issuing
and depositing checks between the LVS account and the RRA accounts,
co-conspirator Rothstein and defendant Lippman would artificially inflate
posted balances in each of the checking accounts, which allowed them to
unlawfully obtain beneficial financing for RRA from financial institutions
during the “float” period, i.e., the time that it took for the checks to clear.
For example, the factual stipulation states that from February 2006 through
February 2008, Lippman issued checks in amounts ranging from $4,000 to
$400,000, totaling approximately $10,311,688, from the LVS account. At the time
many of the checks were written, there were insufficient funds in the account
of LVS to cover those checks. Defendant Lippman also deposited into the LVS
account checks issued from RRA accounts in amounts ranging from $37,500 to
$330,000, totaling approximately $10,664,987. Lippman and other co-conspirators
engaged in this fraudulent conduct to create the appearance that RRA was an
affluent and successful law firm and to gain additional time to meet the
financial obligations of RRA.
Lastly, the factual stipulation states
that Lippman defrauded the IRS by failing to report as income certain expense
reimbursements and other reportable income he received from RRA. Among other
things, the factual stipulation states that defendant Lippman and
co-conspirator Rothstein agreed that Lippman would be paid a base salary and be
given an expense account for which he would be fraudulently reimbursed for
personal expenditures disguised as deductible business expenses. This was done
so that Lippman and RRA could avoid paying additional federal income and
employment taxes. In addition, Lippman was paid from both the operating account
and the payroll account of RRA but would only receive an IRS Form W-2
reflecting the money paid to him through the payroll account. Lippman would not
report to the Internal Revenue Service the money paid to him by RRA for
expenses.
Mr. Ferrer commended the investigative
efforts of the FBI and the IRS-CID. This case is being prosecuted by Assistant
U.S. Attorneys Lawrence D. LaVecchio, Paul F. Schwartz, and Jeffrey N. Kaplan.
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