Auto magnate Ed Morse, who owns 14 dealerships in Florida and Alabama, thought he was collecting a big judgment in a lawsuit. Instead, his lawyer took him for a $57 million ride, The Miami Herald reports.
In 2006, Morse and his wife, Carol, hired Fort Lauderdale attorney Scott Rothstein to sue a contractor who allegedly botched decorating jobs at their homes in Boca Raton and Maine.
According to the newspaper, earlier this year Rothstein told the Morses they had been awarded $23 million in damages, when actually they had lost the suit. The attorney told the Morses the judge awarded them the proceeds from a Cayman Islands bank account the contractor maintained. But to confiscate the funds, Rothstein said, Cayman law required them to post a bond for 21/2 times the amount of the judgment, or $57 million. They paid Rothstein the amount. Now The Herald says it is unclear where that money is.
The newspaper says Rothstein, 47, is under federal investigation for allegedly running a Ponzi scheme that defrauded investors and law clients out of hundreds of millions of dollars. No criminal charges have been filed, but four investors filed suit earlier this month. Rothstein's lawyer declined to comment.
Morse, 88, founded the dealership group in 1946 with his father. According to The Herald, Rothstein and the Morses were longtime friends. In 2005, Ed Morse Automotive Group lent Rothstein the money to buy a home in Fort Lauderdale.