Suit alleges DeKalb judge candidate ran Ponzi scheme

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By Megan Matteucci

The Atlanta Journal-Constitution

A Colorado company has sued a DeKalb County judge candidate for fraud, accusing him a week before his election of operating a Ponzi investment scheme in a mutual business venture.

Michael Rothenberg, a Dunwoody attorney, said he had not seen the suit, but denied the suit's claims.

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Michael Rothenberg, a Dunwoody attorney, faced allegations brought by Winterhawk Energy and Development Corp. as he prepared to face DeKalb prosecutor Courtney Johnson next week in a run-off election for DeKalb Superior Court judge.

Rothenberg failed to provide a return on Winterhawk's $1.35 million investment last March in Rothenberg's commodities company, Delaware-based Four Five LLC, and he still owed $800,000 on the company's initial investment, according to the lawsuit, which was obtained by The Atlanta Journal-Constitution.

Reached on Tuesday, Rothenberg said he had not seen the suit, but denied the charges.

“It’s patently obvious that this is nothing more than an attempt to derail Mr. Rothenberg’s campaign," said David Farnham, Rothenberg’s attorney. “The allegations are absolutely false and slanderous. This is nothing more than an attempt to extort money and embarrass him.”

Rothenberg has served as chairman of Four Five, which he said buys and sells sugar, fuel and other goods.

The suit alleged that Rothenberg promised short-term, high-yield returns and didn't deliver. He allegedly told Winterhawk that its investment was part of a “trading platform” for international banking, according to the suit.

Rothenberg and his attorney denied the allegations, but said they could not talk about the investment.

“There is a confidentiality agreement and I can’t breach that agreement, but this matter has essentially been resolved,” Rothenberg said. “There is nobody else involved in the deal besides me and the investor. Ponzi schemes involve multiple investors, there are only two investors.”

Rothenberg allegedly promised the company it would receive five times its investment, minus a 25-percent fee within 14 days. He never identified the trader. Rothenberg allegedly gave numerous excuses for not providing a return, including that the Obama administration had interfered. He also threatened to black list the company for “meddling,” the suit claimed.

Winterhawk said its executives met Rothenberg at a social function in New York and agreed to invest much of its capital. The company claimed it lost business opportunities, including plans to expand an oil reserve.

Winterhawk's attorney, Michael Kaeding, declined comment Tuesday.

The suit, which has requested a jury trial, seeks the remainder of the company’s investment, plus $75,000 in damages.