FBI agents search law firm in missing funds probe

* Lawyers say investigation probing possible Ponzi scheme

* Prominent Fort Lauderdale lawyer under investigation

* Partner denounced alleged "substantial" misappropriation

MIAMI, Nov 5 - U.S. federal agents have searched the Fort Lauderdale office of a prominent Florida lawyer in an investigation into his alleged "substantial" misappropriation of investor funds, his company partner said.

Scott Rothstein, 47, of Fort Lauderdale firm Rothstein Rosenfeldt Adler, P.A., returned from Morocco on Tuesday to face an investigation into investors' allegations that hundreds of millions of dollars of their funds may be missing.

Rothstein's partner, the law firm's president Stuart Rosenfeldt, said FBI and Treasury Department agents served a warrant to search the firm's Fort Lauderdale offices late on Wednesday, and he and the company were cooperating fully.

"We want them to search and look for everything they need to find evidence of any crimes that may have occurred," Rosenfeldt said in video posted on Thursday on the Florida Sun-Sentinel's website.

Lawyers and investors have told reporters the ongoing inquiry was focusing on whether Rothstein, who lived a luxury lifestyle and donated millions of dollars to local politicians, may have operated a Ponzi scheme at the law firm in which he allegedly sold fabricated legal settlements to investors.

The settlement ventures allegedly offered to investors by Rothstein involved lucrative whistle-blower and employment discrimination cases. The investors would make up-front cash payments to individuals owed money from the court cases to buy the right to collect the full amount of the settlements later.

Rosenfeldt himself denounced the suspected wrongdoing on Monday, filing a legal complaint in a Fort Lauderdale court to wind up the law company and appoint a receiver. The complaint cited allegations that Rothstein had misappropriated "substantial funds" from investor trust accounts.

Federal authorities have declined to give details of the ongoing investigation. Neither Rothstein nor his lawyer were available to comment.

The Miami Herald on Thursday quoted Rosenfeldt as saying that when he checked the law firm's operational accounts on Sunday he saw a balance of only $117,000. A retired Miami-Dade judge has been appointed to act as receiver.

In his comments to The Miami Herald, Rosenfeldt said Rothstein had handled the firm's accounts while he ran the legal side of the law company, which was founded in 2002 and had offices in Florida, New York and Venezuela

Asked in the Sun-Sentinel video whether he had spoken to Rothstein this week, he replied: "I don't want to speak to my partner."

The case was the latest high-profile fraud scandal to hit Florida, the home of many wealthy Americans.

The southeastern U.S. state has been rocked by a number of high-profile Ponzi schemes in the course of the year, including fallout from the fraud scandals surrounding convicted Wall Street swindler Bernard Madoff and accused Texas financier Allen Stanford.