Ex-TD Bank Exec Spinosa Charged With Aiding Ponzi Schemer Rothstein
By Jay Weaver, Miami Herald
MIAMI — Federal agents arrested a fired Toronto Dominion Bank executive early Friday on charges of aiding Fort Lauderdale lawyer Scott Rothstein’s $1.2 billion Ponzi scam.
Frank A. Spinosa Jr., a former regional vice president of the bank, was granted a $250,000 bond and released after being indicted on wire-fraud conspiracy and other counts. He allegedly helped Rothstein steal millions of dollars from trust accounts at a TD Bank branch in Fort Lauderdale that belonged to his investors.
Spinosa is accused of lying to some of Rothstein’s investors and producing a series of misleading documents that showed only they had access to their money in the TD Bank accounts.
Although Spinosa became a huge liability for TD Bank as it faced lawsuits brought by Rothstein’s investors, his defense attorney asserted he did nothing wrong.
“The indictment comes as a relief to Mr. Spinosa,” Miami attorney Sam Rabin said after his bond hearing Friday in federal court. “He will finally have his day in court and be able to explain why he is innocent to a jury.”
Spinosa is among the last of about 30 co-defendants who have been charged in connection with Rothstein’s investment racket, which unraveled five years ago as the lawyer fled to Morocco before returning to South Florida to confess to his massive financial crime. What makes his criminal case unusual is that the vast majority of Rothstein’s co-defendants cut plea deals to avoid long prison sentences.
Rothstein, convicted of racketeering, fraud and other charges, is serving a 50-year prison sentence.
In late 2011, Rothstein testified during a civil bankruptcy proceeding involving his former law firm that he paid off Spinosa. The disbarred attorney said that without help from Spinosa, his swindle would have crashed.
Rothstein claimed he once slid Spinosa an envelope filled with at least $50,000 during one of their regular lunch meetings at Rothstein’s downtown Fort Lauderdale restaurant, Bova Prime. Spinosa helped pull off the fraud for the money and the chance to take part in the “rock star lifestyle” offered by the Rothstein Rosenfeldt Adler law firm, Rothstein alleged.
Spinosa’s attorney, Rabin, said at the time that Rothstein was lying, falsely accusing anyone he could of crimes in order to get his sentence reduced.
“Same con man, different motivation,” Rabin said. “The facts are Spinosa did not take part in the ‘rock star lifestyle.’ He did not receive money, the amount of which changed in each (of Rothstein’s) statements, and internal bank records reflect he did not look the other way.”
In September of last year, TD Bank agreed to pay $52.5 million in penalties to the federal government after regulators said it allowed Rothstein’s Ponzi scheme to flourish.
The fines came on top of the more than $400 million the bank has paid in restitution and damages to hundreds of Rothstein’s investment victims, who bought fabricated legal settlements in exchange for promised high returns.
TD Bank reached a $37.5 million settlement with the Office of the Comptroller of the Currency and Financial Crimes Enforcement Network and a separate $15 million deal with the U.S. Securities and Exchange Commission.
Federal regulators accused TD Bank of failing to file suspicious activity reports despite the massive amounts of money flying through the bank accounts of Rothstein’s law firm. The bank filed five late so-called SARs in 2011 involving an estimated $900 million in suspect transactions.
The SEC alleged TD Bank and then-regional vice president, Spinosa, also misled Rothstein’s investors about the safety of their accounts.
Spinosa had assured some investors that accounts held millions of dollars in them when those accounts held less than $100, federal regulators alleged.
Last September, the SEC filed a civil lawsuit against Spinosa, who denied the allegations.
Photo: Matthew G. Bisanz, via Flickr