Scott Rothstein’s Jeweler Settles Lawsuit

The Florida jeweler that kept Ponzi-scheme operator Scott Rothstein and his wife decked out in diamonds and luxury watches agreed to settle a lawsuit aiming to recover the $2.4 million Rothstein paid it over the years.

SPD Group Inc., which does business as J.R. Dunn Jewelers, recently agreed to pay $325,000 over the next two years to settle the suit, court papers show—money that will help pay off the creditors of Rothstein’s defunct law firm.

As we previously reported, the July 2011 lawsuit alleged that Rothstein used his law firm’s funds to rack up $2.4 million in personal jewelry purchases—including platinum earrings and Swiss watches—at J.R. Dunn between November 2005 and October 2009. Bankruptcy laws allow for the unwinding of such fraudulent deals, and the trustee overseeing the Rothstein law firm’s liquidation has filed many lawsuits targeting Rothstein’s misuse of his firm’s funds.

While the settlement is for less than half of what the lawsuit sought, trustee Herbert Stettin said the terms are favorable in light of the jeweler’s ability to finance a “protracted” and expensive legal battle.

The settlement (h/t Palm Beach Daily Business Review, sub. req.) is subject to the approval of the U.S. Bankruptcy Court in Fort Lauderdale, Fla., where the Rothstein Rosenfeldt Adler firm is liquidating. An Oct. 5 hearing has been scheduled.

Meanwhile, J.R. Dunn is helping to search for an 8.91-carat diamond, one of the most valuable jewels that Rothstein’s wife, Kim Rothstein, allegedly hid from the authorities. She pleaded not guilty to the charges last week, according to the South Florida Business Journal.

Write to Jacqueline Palank at [email protected].