SEC Busts Failed|Judicial Candidate

ATLANTA (CN) - Michael Rothenberg, an attorney who ran for DeKalb County judge last year, raised $1.7 million in a prime bank scheme and spent at least $190,000 on his judicial campaign, the SEC says.

The SEC says Rothenberg, 32, of suburban Dunwoody, raised the $1.7 million through his company Four Five LLC and swiped at least $800,000 of it.

"Rothenberg represented that the trading platform would produce returns in excess of 300 percent every fourteen days," the SEC says in its federal complaint.

But the SEC says the so-called trading platform "does not exist."

The SEC says Rothenberg took the money from investors in Colorado and New Jersey.

Rothenberg was sued last November, a week before the election, by a Colorado company that claims it invested $1.35 million in Four Five and that Rothenberg still owed it $800,000.

Those numbers track the allegations in the SEC complaint.

At the time of the November lawsuit, Rothenberg, through his attorney, told the Atlanta Journal-Constitution: "The allegations are absolutely false and slanderous. This is nothing more than an attempt to extort money and embarrass him."

Rothenberg "allegedly gave numerous excuses for not providing a return, including that the Obama administration had interfered," the Journal-Constitution reported.

Rothenberg claimed to be chairman of Four Five, which he said sold sugar, fuel and "other goods," according to the newspaper.

But the SEC said that wasn't quite the story.

"Between March 2010 and October 2010, at least $210,000 in investor funds were transferred to a bank account designated for contributions to Rothenberg's judicial election campaign," the SEC says in its complaint. "Rothenberg used another $190,000 of investor funds for personal expenses.

"Although Rothenberg ultimately returned approximately $910,000 to investors, Defendants have misappropriated at least $800,000 of investor funds."

Rothenberg lost the election.

In prime bank schemes, scammers claim to have access to preferred banking deals that allow them to pay fantastic returns.

The Journal-Constitution reported on Nov. 23, 2010 that Rothenberg had told it: "There is a confidentiality agreement and I can't breach that agreement, but this matter has essentially been resolved. There is nobody else involved in the deal besides me and the investor. Ponzi schemes involve multiple investors; there are only two investors."

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