Don Henley and Others Return Donation Money from Ponzi Schemer Scott Rothstein

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February 10, 2012; Source: South Florida Business Journal | What do you and your nonprofit do if the charitable contribution you’ve received comes from a convicted Ponzi scheme perpetrator? Eagles singer Don Henley now knows.

Henley created a nonprofit called the Caddo Lake Institute near his home in Texas to protect the wetlands and habitat of the Caddo Lake region, which is known for its wildlife diversity and internationally important wetlands that are now threatened by invasive species and environmental flows. Scott Rothstein made an ill-gotten donation of $100,000 to the institute before his $1.2 billion Ponzi scheme collapsed, in 2009. In return, the Eagles played a song for Rothstein’s wife in honor of her birthday—“Life in the Fast Lane,” probably an appropriate choice for a Ponzi schemer’s spouse. Rothstein’s case has been well-profiled in the press and was featured on CNBC’s “American Greed” last year.

Now that Rothstein gets to celebrate 50 more years of his wife’s birthdays from his residence in a jail cell, the bankruptcy trustee overseeing restitution to Rothstein’s victims is asking various entities to return some portion of Rothstein’s stolen money. In a deal with the trustee, the Caddo Institute is returning $50,000. Likewise, The March of Dimes Foundation, which received $50,000 from Rothstein, is returning $20,000.

In addition to his charitable donations, Rothstein was known for purchasing exotic cars, yachts, and such. Sometimes, high-flying spenders like Rothstein deserve a second look from the nonprofits that they support; that unexpected donation from someone who seems to have no connection to the nonprofit’s values and mission might just be a future candidate for a court-ordered settlement. –Rick Cohen