Rothstein house in foreclosure auction
Providence Journal, January 17, 2010 by Christine Dunn, Journal Staff Writer
A foreclosure auction has been rescheduled for Friday, Jan. 22, at one of the two Narragansett houses owned by a disbarred Florida lawyer charged in an alleged $1.2-billion Ponzi scheme.
Scott W. Rothstein, who was arrested Dec. 1, purchased two side-by-side houses, at 11 and 15 Bluff Hill Cove Farm Rd., from onetime Rhode Island nightclub magnate Michael C. Kent in 2008 and 2006, respectively.
Despite having drastically different assessed values, both were sold for the exact same price, $2.8 million, according to town records.
“There are many more questions than answers down there,” John Hodnett, a Narrangansett resident and principal broker at Lila Delman Real Estate, said of the properties.
Hodnett said that Kent provided 100-percent financing to Rothstein for both houses.
“No bank is involved,” he said.
He added that both transactions raised eyebrows in the local real estate community because the sales prices seemed much too high given market conditions.
“The numbers, at the time, were ridiculous,” he said. The houses, near Bluff Hill Cove, while “nice … are not in an estate area,” he said.
According to Narragansett records, 11 Bluff Hill Cove Farm Rd., which had been co-owned by Rothstein and Kimberly A. Rothstein, has an assessed value of $2,579,600. The couple bought it on July 8, 2008.
Rothstein had been listed as the sole owner of 15 Bluff Hill Cove Farm Rd., which is the house scheduled for foreclosure auction on Jan. 22. The house is assessed at a value of $1,920,600.
Today, the owner of record for both properties is a limited liability corporation. On Oct. 20, Rothstein filed a quit-claim deed in Narragansett Town Hall turning over ownership of the properties, without any exchange of money, to a limited-liability corporation based in Delaware called NRI 15.
In November, prosecutors filed an amended forfeiture suit against Rothstein, adding four properties to their seizure list, including the Narragansett houses, The Sun Sentinel of Fort Lauderdale, Fla., has reported.
Hodnett said he doubts the foreclosure auction sale will be successful because of all the issues involved; in addition, the deeds for both properties “are confusing,” and he believes the services of a title attorney would be required to make sense of them. He said he believes the transactions were “part of a larger, more complicated deal.”
Hodnett added that he doubted the true market value of the properties today is equal to their assessed values.
The advertised Jan. 22 foreclosure sale is set for 10 a.m. on the premises. Comment was unavailable from Darrow Everett LLP, the Providence law firm representing the mortgage holder, or Rothstein’s Florida attorney, Marc S. Nurik.
Rothstein, 47, of Fort Lauderdale, has been accused of misappropriating money through investments in legal settlements that his law firm allegedly handled. Investors began to call authorities in late October 2009, when they failed to receive their scheduled payments.
Providence Journal, January 17, 2010 by Christine Dunn, Journal Staff Writer |
