Rothstein Trustee Sues Jeweler to Recoup $2.4 Million

Associated Press
Scott Rothstein

Scott Rothstein’s “obsession” with luxury watches, including one that cost the disbarred attorney more than $228,000, has landed a South Florida jeweler in the middle of a legal battle.

Independent jeweler J.R. Dunn on Thursday was hit with a lawsuit demanding the return of $2.4 million, according to papers filed with the U.S. Bankruptcy Court in Fort Lauderdale. The suit was filed by the Chapter 11 trustee heading up the liquidation of Rothstein Rosenfeldt Adler PA, the Florida law firm that Scott Rothstein led before his arrest on charges that he ran a massive Ponzi scheme.

According to the trustee, Herbert Stettin, Rothstein used his law firm’s funds to rack up $2.4 million in personal jewelry purchases at J.R. Dunn between November 2005 and October 2009. Stettin said Rothstein either passed the law firm’s funds through his personal checking account or paid directly from the firm’s bank account. The trustee said he’s asked the jeweler to return the funds that weren’t Rothstein’s to pay, but J.R. Dunn has refused.

Sean Patrick Dunn, the son of the jeweler’s founder, told the Sun Sentinel in an email that he doesn’t expect the trustee’s lawsuit to prevail.

“The reality is we did not know anything about fraudulent activities and the trustee doesn’t claim we did,” Dunn said. “All we did was sell jewelry at a fair price and I would expect the court to dismiss the case.”

Stettin’s lawsuit describes the cozy relationship between Rothstein, Dunn and his father, James Robert Dunn, who all worked in the same building. Stettin said the Dunns worked hard to develop relationships with devoted customers like Rothstein, and for a long time the trustee said this relationship was “friendly” but “strictly arms-length.”

That changed around 2005, Stettin said, as Rothstein “became a frequent, high-end client.” According to the trustee, not only did Rothstein drop several million dollars over a four-year span on merchandise, but the Dunns also allowed him to take merchandise and pay later. They also invited him to “private viewings of high-end watches,” and they hired Rothstein to represent them in legal matters. Put simply, they treated him “unlike any” of its other high-end clients (like Sharon Osbourne?).

“For example, Rothstein was regularly allowed to take expensive jewelry out of the store, or alternatively, have it delivered to his office, and was not required to pay for it under consistent terms or business practices. Rather, Rothstein paid with little regularity either as to time or mode,” Stettin wrote.

You can see the lawsuit—and a list of watches, necklaces, earrings and cuff links Rothstein purchased from J.R. Dunn—here.