Now a bust out of Fort Lauderdale, Fla., is putting two hospitals in a perhaps even more difficult position: Parts of their hospitals were named after the alleged ringleader of what is being described as a Ponzi racket that reaped up to $1 billion.
Scott Rothstein, a high-flying South Florida lawyer known for his opulent lifestyle in public and extreme privacy at work, was accused by federal officials of selling sham shares of annualized lawsuit settlements in exchange for upfront payments. Some of the proceeds allegedly went for things like a red Ferrari, an 80-foot yacht, an ownership stake in the famed Gianni Versace mansion in Miami's South Beach, and naming rights to two hospital expansions. While Rothstein has not been charged criminally, according to local media reports, federal authorities began seizing his property last week.
Just last month, the Joe DiMaggio Children's Hospital, as part of the Memorial Regional Hospital in Hollywood, Fla., named its pediatric emergency department the Rothstein Family Foundation Emergency Department because of Rothstein's philanthropic support. “We found it necessary to remove the signage relative to the Rothstein Family Foundation donation because of the extreme nature of the allegations regarding Mr. Rothstein,” says hospital spokeswoman Marla Oxenhandler, adding that any unspent donation funds are being held until the matter with Rothstein is resolved.
In Fort Lauderdale, Rothstein had the check-in area of the new Dorothy Mangurian Comprehensive Women's Center at the Holy Cross Hospital HealthPlex named the Rothstein Family Foundation Lobby in honor of his $1 million gift to the hospital in October 2008. The hospital and its parent system, Catholic Health East, did not respond to Outliers' requests for comment. Holy Cross officials have had several interactions with Rothstein in recent years. This summer, the hospital was one of the top sponsors of an American Heart Association ball that raised $1.2 million for the association, with Rothstein and his wife, Kim, serving as co-chairs of the ball.
And in November 2008, Holy Cross sponsored a banquet to honor Rothstein being named Outstanding Philanthropist of the Year by the local chapter of the Association of Fundraising Professionals. The photo of Rothstein used on the Web site announcing the award shows Rothstein handing a big $1 million cardboard check to Holy Cross President and CEO John Johnson.
Local media reports say investors have filed lawsuits in attempt to recoup their contributions that Rothstein donated to charities.