Rothstein said Nordlicht told him his father had been investigated for fraud and that he didn’t want to relive the experience. He talked about the situation with Bank of Montreal.

“He was trying to explain to me without using the words that he was a player, that he got it,” Rothstein said. “He said these things only blow up when the parties start fighting.”

Never Charged

Rothstein said in his deposition that Nordlicht agreed to lie by giving positive references to potential investors. Over the next six months, Rothstein said, Platinum and related funds stopped advancing him money and received all but about $20 million back as he raised cash from others.

Nordlicht was never charged in connection with the Ponzi scheme and has denied helping Rothstein, who’s now in the witness protection program because he also informed on organized crime. Nordlicht wrote to investors that Platinum, like others, was tricked by Rothstein and that the fund recovered its losses by suing a bank for its role in the scheme.

With potential losses from Rothstein’s fraud averted, Platinum’s main fund posted gains of 21 percent in 2009 and 19 percent in 2010, according to investor presentations.

That year the fund popped up on the radar of the SEC, which was investigating a scheme involving a Los Angeles rabbi who, the agency later alleged, tricked terminally ill hospice patients into providing personal information so annuities could be purchased in their names.

The annuities were funded by Platinum, which had put up more than $56 million, according to investigation records. It spent four years building its case. But when its enforcement actions were announced in 2014, the SEC only fined the intermediaries who ran the scheme and a shell company set up by Platinum to hold its money. Nordlicht and the fund itself weren’t named or accused of wrongdoing.

Oil Flop

By then, Platinum was inflating its returns by reporting false valuations for some assets, according to prosecutors in Brooklyn who brought charges last month. One of the biggest was the California oil fields. The firm’s year-end financials for 2014 valued them at about $140 million. In reality, the project was a flop that barely produced any oil, people familiar with the matter said in August.