He was charged under a statute often used to prosecute organised crime chiefs.

The massive scope of Rothstein's alleged scheme has prompted some pundits to place him in company with other Ponzi scheme fraudsters like Bernard Madoff, who pleaded guilty to a $65 billion investment fraud and is now serving a 150-year prison sentence.

Court documents have said Rothstein acted with co-conspirators to carry out the $1.2 billion scheme, creating false bank documents that conned investors while providing "gratuities to high-ranking members of police agencies" in order to deflect law enforcement scrutiny.

No co-conspirators have been identified but the documents, along with Rothstein's imminent guilty plea, suggest that additional defendants could be charged.

Lawrence LaVecchio, a prosecutor involved in the case, declined to comment when asked about the reasons for Rothstein's change of plea.

Luxurious lifestyle

The cigar-chomping Rothstein, a frequent campaign contributor often photographed with local politicians, lived a lavish life with opulent homes and a fleet of foreign sports cars. He used his connections and charm to lure wealthy friends and patrons to invest with him.

Court documents accuse Rothstein, 47, of selling shares in fabricated legal settlements to unsuspecting investors since at least 2005 and using new investor money to pay previous investors in the classic Ponzi scheme model.

He claimed to have won lucrative awards in workplace discrimination and whistleblower lawsuits, when no such settlements existed, federal investigators said.

In one instance, prosecutors charged, Rothstein falsely told clients they had won a $23 million judgment in a lawsuit but needed to put up more than twice that amount as a bond in order to recover the money.

The unsuspecting clients did so, and Rothstein used their money to run his now-defunct law firm, make political and charitable donations, and buy cars, yachts, jewelry and controlling interests in restaurants and other businesses, prosecutors charged.

FBI and Internal Revenue Service agents raided Rothstein's Fort Lauderdale law offices in November and seized his waterfront home, yacht and nearly two dozen properties in Florida, New York and Rhode Island.

Investors have already begun filing lawsuits saying they were cheated and should get a share of the assets.

Rothstein was chief executive and managing partner in the firm of Rothstein Rosenfeldt Adler PA, which had about 150 employees and was placed in receivership in November.