Saturday, December 19, 2015


Frank Spinosa, the TD Bank Senior Vice President who wrote the infamous "lock letters," which falsely warranted that the bank had large restricted accounts for the investors in Scott Rothstein's bogus court settlement Ponzi scheme, was sentenced this week to two and one-half years in Federal Prison.  Spinosa was terminated by the bank when the details of the billion dollar fraud came to light.

The sentence handed down in US District Court* was shorter than the recommended guidelines, and there were some health considerations, but some observers may question the length of the sentence, inasmuch as the defendant was a banker, and one of the purposes of sentencing is to act as a deterrent, to prevent others, similarly situated, from considering engaging in criminal conduct. Was the sentence to short, given the size of Rothstein's Ponzi scheme, and its impact upon the victims ?

The other issue, which will now not be resolved, since Mr. Spinosa has entered a plea, and there will never be a trial, is whether any other senior officers at TD Bank had any knowledge of the Rothsteib fraud; he was a lucrative client for the bank, and even the most rudimentary due diligence inquiry would have revealed that there were no lawsuits filed, to support Rothstein's claims of a boatload of  employee discrimination, and sexual harassment lawsuit settlements available for investors.

In any event, Mr. Spinosa, who had experienced legal counsel, ends up with a relatively short sentence, when compared to many of the other 28 Rothstein defendants. Whether there will be any others ultimately charged in this scandal, including other TD Bank officers, is not known.
* United States vs. Spinosa,  Case No.: 14-60257-CR-BLOOM (SD FL).

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