Monday, February 1, 2010

Florida – Clawback of Charitable Donations

The Miami Herald recently reported that more than $2 million in donations made by attorney Scott Rothstein’s firm, Rothstein Rosenfeldt Adler, to Florida charities must be given back.  Mr. Rothstein’s firm went into bankruptcy and Mr. Rothstein has been disbarred because of his involvement in a $1 billion Ponzi scheme.

The clawback affects 30 local Miami charities including hospitals, schools, and charities benefiting battered women that Mr. Rothstein’s firm donated to in 2009.  Some of the charities have voluntarily returned the money.  However, many organizations have already spent the donations and at least one charity is at risk of losing $1.5 million in federal matching grants if it cannot raise sufficient funds to replace the donations that must be returned.  Many charities affected are working with the lawyers overseeing the bankruptcy to determine the correct amount that must be returned so that creditors affected by the collapse of a $1 billion Ponzi scheme can recoup some of their losses.


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