CFO AT LAW FIRM ENGAGED IN PONZI SCHEME CHARGED IN FEDERAL COURT

Irene Shammon

We continue to see lesser players in the Scott Rothstein $1.2bn Ponzi scheme charged with criminal activity, due to their role in the massive fraud, where Rothstein's law firm sold phantom legal settlements to investors. Irene Shannon, formerly known as Irene Stay*, was charged with Conspiracy to Commit an Offense against the United States, specifically being money laundering, and bank fraud.

The defendant, who was the bookkeeper at the now-defunct Rothstein, Rosenfeldt Adler law firm, and who later was designated Chief Financial Officer, allegedly:

(1) Unlawfully moved investor money from the firm's trust accounts, into the RRA operating account, to pay firm operating expenses, and bank overdrafts, and to pay for houses, luxury automobiles, and other extravagances of Scott Rothstein and his wife, both of which are presently serving sentences in Federal Prison.

(2) Engaged in check kiting, using checks given by co-conspirators in the scheme, to temporarily fatten up firm bank accounts, so that it qualified for interim financing at those financial institutions. The total amount of money she moved in that way exceeded $10m. This constitutes bank fraud.

The charging document was a Criminal Information, which is generally an indication that she is cooperating with law enforcement in the case. The maximum penalty is five years in Federal Prison, plus three years of Supervised Release, and a substantial fine.

Who at the firm will be charged next ?

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*Case No. 14-cr-60081-RSR (SD FL).