FORT LAUDERDALE (CBSMiami/AP) — Convicted Ponzi schemer Scott Rothstein’s former bookkeeper turned chief financial officer of his now defunct law firm has been charged.
Federal prosecutors filed a court document Wednesday charging Irene Shannon, 50, with one county of conspiracy to commit money laundering and bank fraud.
The document contends that Shannon oversaw much of the accounting and banking at the Rothstein Rosenfeldt Adler law firm and was well aware of the $1.2 billion Ponzi scheme.
According to prosecutors, Shannon printed out bank balances for all of the firms counts and discussed with Rothstein the amounts of money which needed to be transferred to pay investors in his investment scam. Shannon reportedly transferred hundreds of millions of dollars obtained from investors to pay prior investors in the scheme and to supplement and support the operation and activities of the firm.
Federal investigators said Shannon was well aware that hundreds of millions of dollars were not being held in trust accounts for investors, contrary to what those investors had been told, and that the funds were instead being disbursed to further Rothstein’s fraudulent scheme.
Shannon also reportedly utilized her position to float checks between and among certain bank accounts maintained by the law firm in a form of bank fraud commonly known as “check kiting.”
Court records Wednesday did not list an attorney for Shannon. The type of document filed by prosecutors indicates that she will eventually plead guilty. Shannon could face up to five years in federal prison, thousands of dollars in fines and three years of supervised release.
Rothstein is serving a 50-year prison sentence after pleading guilty to orchestrating the scam, which involved investments in nonexistent legal settlements. More than a dozen people have also been convicted in the case.
(TM and © Copyright 2014 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2014 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)