Rothenberg pleads guilty to defrauding investors, faces up to 20 years
10/25/2013, 6 a.m.
Michael Rothenberg, who was a candidate for the DeKalb Superior Court in 2012, has pleaded guilty to defrauding investors, the owners of WinterHawk Energy and Development Corp.
Rothenberg was challenging incumbent Judge Gail Flake in July 2012 when he was indicted.
He also ran for the Superior Court in 2010 and was defeated in a runoff by Courtney Johnson, a former senior assistant DeKalb district attorney.
Rothenberg faces a maximum sentence of 20 years in prison and a fine of up to $250,000.
Sentencing is scheduled for Nov. 18 at 10 a.m. before U.S. District Judge Steve C. Jones.
U.S. Attorney Sally Quillian Yates said that Rothenberg stole from investors who trusted his judgment.
“His fraud is particularly egregious because he was involved in defrauding investors at the very time he was seeking to be elected as a DeKalb County Superior Court judge, and because he used a portion of the illegal proceeds to fund his political campaign,” Yates said. “Ultimately, his fraud scheme was uncovered, and his quest to be elected ended in failure.”
Mark F. Giuliano, special agent in charge of the FBI Atlanta Field Office, said that Rothenberg will be held accountable for his criminal actions.
“Investment fraud schemes often have at their core individuals who appear very credible,” Giuliano said. “These schemes often end with those individuals being revealed as greedy and uncompassionate for those devastated investors whose trust they betrayed.”
Yates said Rothenberg, 35, deceitfully persuaded the owners of Colorado-based WinterHawk Energy and Development Corp. to invest a total of $1.35 million and told them the funds would be placed in a trust account, controlled by him, and used to fund the trading of notes by large financial institutions.
Rothenberg told the investors that the notes would be split into “tranches,” and a 10 percent profit would be earned each time a note or “tranch” was traded. He told them that the investment involved no risk.
“In fact, no investment existed and Rothenberg used the money paid by WinterHawk to fund his political campaign for a seat on the DeKalb County Superior Court as well as to pay personal expenses,” Yates said.
During the scheme, Rothenberg placated the investors’ concerns and convinced them the investment opportunity was real by emailing them fabricated bank statements, which made it appear that he was wealthy, and that the money they had invested remained in his trust account.
From time to time Rothenberg returned some of the money to the investors in response to their demands and claimed falsely that he was making up for the shortfall by personally investing his own money.
Yates said that Rothenberg did not invest his own money and in fact spent the remaining proceeds – about $800,000 – without the investors’ knowledge or consent.
The case was investigated by the FBI and prosecuted by Assistant U.S. Attorney Steven D. Grimberg with assistance from the DeKalb District Attorney’s Office.