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Dan Marino Foundation Won't Have To Pay Back Scott Rothstein Ponzi Donations, Judge Says

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A federal judge has thrown out lawsuits filed against two well-known South Florida charities by attorneys tasked with recouping money for Ponzi schemer Scott Rothstein's investors.

The Dan Marino Foundation and HomeSafe are not obligated to pay back any of the donations they received from Rothstein or his law firm, Rothstein Rosenfeldt Adler, ruled U.S. Bankruptcy Judge Raymond B. Ray. Attorneys representing the now-defunct law firm's bankruptcy trustee had been seeking $259,000 from the Dan Marino Foundation and another $60,000 from HomeSafe in what are known as "clawback" lawsuits.

Ray's rulings are the first to set aside any of the more than 130 "clawback" lawsuits brought by bankruptcy trustee Herbert Stettin's legal team. Stettin's attorneys already have recovered more than $100 million for investors in Rothstein's $1.4 billion Ponzi scheme, the largest investment fraud in South Florida history.

The judge found the Dan Marino Foundation and HomeSafe didn't know Rothstein was operating a Ponzi scheme and provided genuine goods and services.

Rothstein purchased items at charity auctions put on by the Dan Marino Foundation and gave the group another $25,000 for the famed Miami Dolphins quarterback to speak at an event sponsored by the law firm. The Dan Marino Foundation helps children and young adults with autism and special needs.

In HomeSafe's case, Rothstein sucessfully bid on two paintings at a charity auction and those paintings have since been recovered. HomeSafe is dedicated to protecting victims of child abuse and domestic violence.

An attorney who represented both charities said the lawsuits never should have been filed. Ray dismissed the HomeSafe case on Oct. 18 and the Dan Marino Foundation case on Oct. 30.

"My clients were vindicated by the rulings and we were in the clear legally and factually under the bankruptcy code," said Steven Fender, one of the non-profits' attorneys.

The Dan Marino Foundation and HomeSafe had been among more than 30 nonprofits that received money from Rothstein and his law firm. Almost all reached agreements with Stettin without lawsuits being filed.

"If the trustee had to lose a case, we would just as soon it be a loss to someone who is a real pillar in the community such as Dan Marino," said Charles Lichtman, one of Stettin's attorneys. "We lost this case -- not even Dan Marino completed all his passes."

Rothstein, 50, is serving a 50-year prison sentence after pleading guilty in 2010 to orchestrating the Ponzi scheme., 954-356-4491 or Twitter @jkburstein ___

(c)2012 the Sun Sentinel (Fort Lauderdale, Fla.)

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