Scandal! Five Juicy Tales That Rocked South Florida

(Photo by Stephanie Keith/Getty Images)

Here in South Florida, we’re never far from the next sordid headline; here are a few of the classics

It is perhaps hard-baked into the DNA of South Florida.

We are, after all, a place settled by prospectors who made fortunes selling plots, sight-unseen, to northerners. Which turned out to be prime pieces of swampland.

Those same hucksters often ended up representing the commoners. Consider what happened when Florida railwayman Henry Flagler wanted to get a divorce: He just paid off lawmakers until they made it legal. For one man. After his divorce was granted, the state reversed the law.

Florida remains a peninsula where political dynasties pop up like cheaply constructed suburban McMansions: glamorous palaces rising from the sawgrass and yet built of Chinese drywall ready to implode from the black mold of payoffs.

Even as we shake our heads at the greed, we can’t help but devour the stories. It’s almost with a sense of pride that we boast of our political implosions that rival Chicago or Kansas City or New York.

As proof, consider these recent doozies, where federal prosecutors and sleazy headlines descended on us like snowbirds in November.

THE WORLD’S MOST CONNECTED PEDOPHILE

It was perhaps foreboding that Jeffrey Epstein was dismissed in 1976 from his first job, teaching at a private school on the Upper East Side, for “poor performance.” This was, after all, a man who decidedly should not have been allowed near children.

But during his two-year stint as a teacher, Epstein had been able to befriend the father of one of his students. The man was the chief executive of Bear Stearns, and he offered Epstein a job. Epstein had an aptitude for trading, and he climbed quickly, becoming a limited partner in just four years.

He founded his own firm in 1981, working, as he described it, as a financial bounty hunter, the Wall Street version of “Star Wars” bounty hunter Boba Fett, tracking down money stolen from wealthy clients. He added his own wealth management firm in 1988, bought New York magazine in 1993, and in the early 2000s became a pioneer in the repo debt market that helped cause the Great Recession.

He counted among his acquaintances many of the powerful and famous: Bill Clinton, Donald Trump, Woody Allen, Harvey Weinstein, Rupert Murdoch, Michael Bloomberg, Richard Branson, Michael Jackson, Alec Baldwin.

All the while, we know now, he was also a pedophile and sex trafficker.

That became clear in 2005, when Epstein paid a 14-year-old girl $300 to strip and give him a massage at his Palm Beach mansion. The woman’s stepmother reported the incident to the Palm Beach Police. The FBI would end up joining the investigation into Epstein, dubbing it “Operation Leap Year,” and finding 36 underage victims, many recorded on cameras Epstein had hidden around his mansions.

Police filed charges in 2006 accusing Epstein of sex with minors. He hired an all-star team of lawyers: Roy Black, Alan Dershowitz, Ken Starr. They got Epstein an unbelievable deal: After he pled guilty to two charges, he spent just three and a half months in an unlocked room in a private wing of the county stockade before being allowed to leave for 12 hours a day, six days a week, for “work release.” In all, he served just 13 months.

In July 2019, federal prosecutors arrested Epstein again on charges of sex trafficking of minors whom he put on private jets between Florida and New York. He died about a month later—a suicide, the medical examiner concluded, although his lawyers disagree.

It would have been easy to assume that the Epstein sex scandal would have died with him. But after allegations that Britain’s Prince Andrew was among those who had affairs with the girls Epstein imprisoned, the prince gave a disastrous interview in November that forced him to withdraw from the royal family’s official duties. The story will continue, perhaps for years, as his victims file civil suits seeking money from his estate. Will the money fix the harm he caused? No. But will the suits reveal who helped Epstein traffic his victims? That’s for the next chapter of the Epstein story.

THE BIGGEST PONZI SCHEMER IN HISTORY, AND HIS DISAPPEARANCE

Scott W. Rothstein fired off a text to his law partners on Oct. 26, 2009, that began: “Sorry for letting you all down. I am a fool. I thought I could fix it, but got trapped by my ego and refusal to fail, and now all I have accomplished is hurting the people I love.”

Then he boarded a plane to Casablanca with $16 million, and but for a few court appearances, few people ever saw him again.

Until that moment, Rothstein’s rise had been one of curiosity for locals. Bronx-born and raised in Lauderhill, Rothstein spent 15 years after law school in relative obscurity. Not long after founding a firm with a couple of partners in 2002, he started selling “structured settlements”—basically investments in the potential of a lawsuit ending a big wad of cash. Soon, he bought his own jet and lived in a waterfront Fort Lauderdale mansion. His law firm had offices from Boca to Caracas, 100 lawyers in lavish spaces. He’d show off his collection of six-figure timepieces to anybody who asked. He parked his million-dollar Bugatti at valet stands and sent rare bottles of wine to neighboring tables.

The problem with Rothstein’s structured settlements was that they were based on few actual lawsuits. Instead, the money investors gave him would be used in part to pay dividends to previous investors—and to pay for Rothstein’s increasingly lavish lifestyle, which kept entire jewelry stores in business. By 2009, the pyramid scheme threatened to collapse as Rothstein’s firm ran out of money.

Rothstein spent a little more than a month on the run. He boarded a chartered flight back to South Florida on Nov. 2, 2009, and would cut a deal with prosecutors, agreeing to testify against mob bosses he claimed to have been working with him for years.

A judge sentenced him in 2010 to spend 600 months in federal prison, a half century. But it could have been reduced because of his cooperation. Prosecutors later said Rothstein lied to them—no surprise there—and so they backed out of the deal. He appealed, and his attorney, Marc Nurik of Boca Raton, claimed Rothstein’s “extraordinary assistance” meant he deserved a break. In October an appeals court disagreed.

So, where is he now? Rothstein isn’t listed as an inmate on any federal database, perhaps because of his cooperation with prosecutors. Officially, he is serving a 50-year prison sentence “in an undisclosed location in the US Bureau of Prisons witness protection system.”

So perhaps he’s out there somewhere now, tossing a valet the keys to his Bugatti.

In that text he sent off to law partners before disappearing, Rothstein ended it by writing: “I hope God allows me to see you on the other side. Love, Scott.”

AMERICA’S NEW CAPITAL OF CORRUPTION

The top federal prosecutor in South Florida got up in front of journalists in 2009. “Today,” U.S. Attorney R. Alexander Acosta said, “I have a sense of déjà vu.”

In just two years, four commissioners in Palm Beach had already been convicted on corruption charges. Then Acosta announced Mary McCarty would be next. She had spent 18 years, a veritable generation, on the Palm Beach County Commission, and held a kingmaker status. Acosta accused her of corruption and said she and her husband had conducted a bond underwriting scheme and benefited from thousands in hotel discounts.

After the indictment, Time magazine declared Palm Beach the “New Capital of Florida Corruption.”

The McCarty corruption bomb dropped not long after Congressman Tim Mahoney lost his re-election bid after coming clean that he had paid hush money to former mistresses. Worse, Mahoney was the man who took the job after Mark Foley’s career ended in a sex scandal of his own.

Before McCarty’s fall, Commissioner Tony Masilotti resigned and then pleaded guilty in 2007 to honest services fraud; he was sentenced to five years. Jeff Koons resigned from the commission, and even after pleading guilty to charges including felony extortion, didn’t serve any jail time. Commissioner Warren Newell got a five-year prison term after pleading guilty in 2007 to honest services fraud, although he was released in 2010.

But McCarty’s scandal may have been the biggest hit to Palm Beach County. She had interned for Tip O’Neill, served as the county’s Republican Party chair, and had counseled a younger generation into politics. McCarty spent 21 months behind bars on a 42-month prison sentence, and her late husband Kevin got out after five months on an eight-month sentence.

McCarty now works as a life coach, and according to her website, offers “24/7” services to her clients, including “how to prepare for prison.” After her release from prison, she told the Coastal Star: “The best part of my life is yet to happen.”

THE RICK SANCHEZ SCANDAL—NO, NOT THAT ONE

If you’ve been in South Florida long enough, you know Rick Sanchez from his WSVN Channel 7 days, as an anchorman when such a title made somebody a luminary—a white-toothed Ron Burgundy deity with a velvet delivery at 5:30 and 10. It was no surprise to those who remember him then that he landed as an anchor at MSNBC and later got his own show on CNN.

His upward rise ended abruptly in 2010 when Sanchez, who once called Obama a “cotton-picking president,” implied that Jews controlled the media. He claimed his CNN bosses were bigots unwilling to see a Cuban man as an anchor, and they canned him.

But no, that’s not the Rick Sanchez scandal we’re writing about here.

For that, we have to go back to a few minutes after midnight on Dec. 10, 1990. Sanchez, then 32, was driving his 1991 Volvo home from a Dolphins game when a man inexplicably jumped out in front of his car. The man was outrageously drunk—a .235 percent blood alcohol level was more than what cops would consider inebriated. Police claimed Sanchez smelled of alcohol and claimed that he told cops and bystanders who gathered on 199th Street that blood tests were pointless and would hurt his career.

For reasons we may never know, the cops seemed to agree and didn’t test him right away. Instead, he drove home to get his driver’s license and proof of insurance. He returned 20 minutes later.

When the cops did take Sanchez’s blood an hour and a half later, the test showed he had a blood-alcohol level of .15 percent, one and a half times the legal limit. Sanchez faced a charge of DUI. His attorney, Richard Essen, told Miami New Times that Sanchez had returned home after the incident and had “a couple of drinks to calm his nerves” before the blood test was taken.

After pleading no contest, Sanchez faced a potential sentence of six months in jail. Instead, he paid $350, served six months of probation, did 50 hours of community service, and completed a 15-hour driving course. Six months later, he got his license back.

The man he hit, construction worker Jeffrey Smuzinick, spent two months in a coma. He suffered brain damage and couldn’t use the right side of his body. He died four years later in a nursing home. He was 35. His family told reporters that the chummy relationship Sanchez had developed with local cops after years of crime scene reporting had led to the sweetheart deal.

These days, Sanchez is far from his CNN glory days. He landed a gig in 2011 as the color commentator during Florida International football games and a weeknight show on the Russian-owned cable news network RT, which also airs programs from Larry King and Jesse Ventura.

Meanwhile, there’s a Twitter page for Jeffrey Smuzinick with a tag line that reads in part: “Rick Sanchez of CNN killed me.” It lists Smuzinick’s location as heaven.

THE ALMOST NEVER-ENDING DIVORCE OF THE CENTURY

Roxanne Dixon had just graduated junior college, selling life insurance and living in a Lake Worth trailer court, when she met her future husband. She was 22 and he was 44. Peter Pulitzer lived on Palm Beach, the heir to the newspaper fortune and worth $25 million. They married in 1975, had twin sons, and set upon a life of utter debauchery.

Or at least, that’s what it seemed if you followed their divorce proceedings after Peter sued for divorce in 1982. The newspapers—not just the tabloids, but the entire media—told sordid tales about the two, who both claimed the other had a long list of affairs, involving the handyman, the French baker and a Grand Prix race driver. Both accused the other of bedding the wife of a millionaire Kleenex heir.

Headline writers named her “Foxy Roxy.” Court papers detailed supposed rampant cocaine use by both of them. Threesomes. Sex with a musical instrument. Even the Washington Post, after Roxanne told her story to Playboy (and also appeared nude for $70,000), asked: “Oh, Foxy Roxy, what more could you possibly want to reveal?”

In what many called the Divorce of the Century, Roxanne got almost nothing: the clothes on her back, a Porsche, her jewelry and $2,000 a month for two years, which the judge called “rehabilitative money.” The Palm Beach Daily News called her “the loser in Palm Beach’s most scandalous divorce.” She taught aerobics for a while.

Peter got custody of the boys and moved to Okeechobee, where he tried his hand at farming oranges.

In 1989, Random House published The Prize Pulitzer, Roxanne’s tell-all book. It remained on the best-seller list for 36 weeks, became a made-for-TV movie and earned her a reported $2 million. She went on to pen novels based on the characters she’d met in Palm Beach.

In 2011, Peter Pulitzer appealed to his ex-wife’s fifth husband, wealth management consultant Tim Boberg, for financial help. Boberg agreed to help save Pulitzer and his sons from bankruptcy. Boberg told the Palm Beach Daily News that it was a sign of just how far Roxanne had come: “It’s an ironic turnaround that no one would have expected. Someone who was so destroyed was able to come back.”

Peter Pulitzer died in 2018. That same year, the palatial Colorado home owned by Roxanne and Boberg mysteriously burned, the police initially classifying the incident as a crime scene. Since then, Roxanne Pulitzer has remained headline-free, perhaps her longest stretch since the so-called Divorce of the Century.

This story is from the April 2020 issue of Boca magazine. For more content like this, subscribe to the magazine.