Florida – Clawback of Charitable Donations

The Miami Heraldrecently reported that more than $2 million in donations made by attorney ScottRothstein’s firm, Rothstein Rosenfeldt Adler, to Florida charities must begiven back.  Mr. Rothstein’s firm wentinto bankruptcy and Mr. Rothstein has been disbarred because of his involvementin a $1 billion Ponzi scheme.

The clawback affects 30 local Miami charities includinghospitals, 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 alreadyspent the donations and at least one charity is at risk of losing $1.5 millionin federal matching grants if it cannot raise sufficient funds to replace thedonations that must be returned.  Manycharities affected are working with the lawyers overseeing the bankruptcy todetermine the correct amount that must be returned so that creditors affectedby the collapse of a $1 billion Ponzi scheme can recoup some of their losses.

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