TPMMuckraker

Single Group Of Hedge Funds Claim $775M Hit In Alleged FL Scam

Justin Elliott December 4, 2009, 12:11 PM

We had wondered how the alleged Ponzi scheme of Scott Rothstein, an attorney, not a financier like Bernie Madoff, could reach the sum of $1.2 billion.

The latest eye-popping number in the case seems to provide an answer: one man’s hedge funds had $775 million tied up in Rothstein’s allegedly phony investments. And now that man, George Levin, is being accused of trying to help Rothstein prolong the scheme.

Five of Fort Lauderdale investor Levin’s Banyon funds are in the list of the top 20 Rothstein creditors, compiled by the trustee in the case. That accounts for about 65 percent of the money in the alleged scheme.

But, the Miami Herald reports, some other investors are alleging that Levin was not merely an innocent victim of Rothstein:

Last week, Levin was accused of conspiring with Rothstein in a lawsuit filed by several Fort Lauderdale investors seeking to recover more than $100 million. The suit claims Levin met with some Rothstein investors on Nov. 1 to discuss a plan for short-term financing that would have prolonged the Ponzi scheme. In a letter issued to investors Monday, Levin said the claims are unfounded.

A lawyer for one of the other investors says Levin had $120 million of his own money invested with Rothstein.

Here’s a profile of the 69-year-old Levin from the South Florida Business Journal. It appears his career in business hasn’t been entirely clean. The Business Journal explains:

But, in 1999, a vintage car kit company owned by Levin was hit with criminal fraud charges for allegedly reeling in customers with an aggressive sales pitch, then not delivering the promised product.
The company was technically called GGL, after George G. Levin, and did business as Classic Motor Carriages, with the same address as Levin’s home.

The company pleaded guilty in 1999 to one count of wire fraud and paid a $25,000 fine and $2.5 million in restitution, according to the plea agreement. Levin later emerged as owner of a new company, Miami-based StreetBeasts, which sells the same kind of vintage car replica kits.