Rothstein Chabad Invokes Clergy Privilege
Paul Brinkmann • South Florida Business JournalPonzi schemer Scott W. Rothstein’s former chabad, the Chabad of Downtown Inc. in Fort Lauderdale, is invoking “clergy privilege” in bankruptcy investigations.
Chabad is a term for a Jewish center run by a strictly orthodox Jewish organization.
This particular chabad, run by Rabbi Schneur Kaplan, was once so connected to Rothstein that its new building on Broward Boulevard carried Rothstein’s name on the outside.
Attorneys for Rothstein’s former law firm, led by trustee Herbert Stettin, are trying to determine where the proceeds of Rothstein’s $1.2 billion Ponzi scheme went. One of the groups they want to investigate is the Chabad of Downtown.
Stettin’s investigators have asked the chabad and dozens of other groups and people to sit for depositions or exams in the bankruptcy. In their notices to the bankruptcy court, they include broadly worded requests for records of “any and all communications” between the target and Rothstein.
Stettin’s investigators even asked the chabad to produce a list of everyone who donated to it since 2007.
That was overly broad, the chabad’s attorney, Reggie David Sanger, wrote in a motion for a protective order against the probe.
“Certain communications requested … may also fall within the clergyman penitent privilege applicable under federal law,” Sanger wrote.
Here, I am left wondering: Did Rothstein confess to the rabbi that he was running a Ponzi scheme, or other incriminating evidence? And, why would that matter, because Rothstein has already pleaded guilty.
Regardless, Sanger seems to have a point that the trustee’s request is broad.
U.S. Bankruptcy Judge Raymond Ray has set a hearing on Sanger’s motion for April 7 at 1:30 p.m.
[Hat Tip: CS.]