ALARMING: NEW JERSEY ATTORNEY GENERAL: Lawyer Stole More Than $1 Million From ‘Elderly’ Woman — And Also Was Part Of Ponzi And Fraud Scheme With His 70-Year-Old Father, Another Man, 83, And 2 Recidivist Hucksters; Michael W. Kwasnik, 42, Charged Criminally, Sued Civilly

Michael W. Kwasnik: Philadelphia attorney accused of stealing from elderly client and benefiting with his 70-year-old father and others from a Ponzi and fraud scheme that bilked about $8.5 million.

A Philadelphia attorney with an office in New Jersey stole more than $1 million from an “elderly” client and also was part of a Ponzi scheme that targeted retirees, New Jersey Attorney General Paula T. Dow said.

For stealing from his client, attorney Michael W. Kwasnik, 42, was indicted for theft by failure to make required disposition of property received, misapplication of entrusted property, theft by unlawful taking and financial facilitation of criminal activity. The facilitation charge is a money-laundering offense.

Building on an earlier civil case, New Jersey regulators and Dow’s office now say Kwasnik and four others were part of a separate Ponzi scheme that gathered about $8.5 million.

In the criminal case, Kwasnik is alleged to have used his purported legal talent for estate planning to bilk the elderly client and the estate of her deceased sister.

“We charge in our criminal case that Kwasnik exploited an elderly client, misappropriating more than $1 million she intended to give to her children,” said Dow. “Just as we allege in our lawsuit that Kwasnik preyed on elderly investors, we charge in the indictment that he took advantage of the frailty of this client and the trust she placed in him in order to deceive and steal. We will aggressively prosecute criminals who prey on this vulnerable segment of our population.”

Stephen J. Taylor, New Jersey’s director of criminal justice, used even starker language.

Kwasnik, Taylor said, is a “cheat and a thief who betrayed his oath as an attorney to uphold the law. We are continuing to investigate his various financial schemes, and we urge anyone with relevant information to contact us.”

Among the allegations against Kwasnik was that he neither held nor invested his elderly client’s trust funds. Instead, he “withdrew the funds from that account within a few months, stealing more than $1 million.”

Kwasnik “misappropriated the funds for his own benefit and for other purposes unrelated to the administration of the estate, including paying other clients and paying the operating expenses of his law firm,” prosecutors charged.

On the civil side of things, the state initially sued entities known as Liberty State Financial Holdings Corp. and Liberty State Benefits of Pennsylvania Inc. in March.

Authorities now say Kwasnik and his 70-year-old father, William Kwasnik of Marlton, N.J., were siphoning proceeds from the sale of  unregistered securities as part of a Ponzi scheme involving the firms.

William P. Leonard, 83, of Cherry Hill, N.J., also was named a civil defendant, as were Joseph Anthony Schifano, 45, of Brick, N.J., and Daniel Francis McCorry, 55, of Ventnor, N.J. Schifano and McCorry were described by the state as recidivist hucksters enjoined in 2005 from breaking securities laws.

The $8.5 million scam drew at least 73 investors, “many of whom were elderly and retired,” prosecutors said.

“We allege that these investors sought secure investments but instead, fell victims to a scam by individuals looking to unjustly enrich themselves,” Dow said.

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