New Jersey Woman Who Fleeced Unificationist Congregation In $15 Million Ponzi Scheme Gets 70 Months In Prison

A New Jersey woman who told members of the Unification Church that they could turn $3,000 into $6,000 in a year by investing in her real-estate business has been sentenced to 70 months in federal prison.

Marcia Sladich, 51, of Clifton, pleaded guilty to mail fraud in July, admitting to U.S. District Judge Katharine S. Hayden that “she did not make real estate investments, but used new investor money to make principal and interest payments to existing investors and to purchase real estate in Florida and Brazil in her name and in the names of her relatives,” prosecutors said.

Some of Sladich’s victims, however, were disinclined to believe that Sladich had ill intent and advanced an explanation that she had been duped. (See link to “Record” near bottom of story.)

Investigators said Sladich operated a Ponzi scheme between 2004 and 2007, collecting $15 million from investors and paying commissions to people who helped recruit others into the scheme.

Although Sladich did buy real estate with some of the funds, she titled it in her name and the names of family members in the United States and Brazil. She also used investors’ money to pay her mortgage and credit-card bills.

In a separate civil prosecution by the SEC, the agency outlined a series of possible tip-offs in Sladich’s offering materials that perhaps signaled investors that they were not doing business with a professional investment company.

These awkward lines all appeared in the offering materials, according to the SEC:

• [t]he agreement of booths (sic) parties convenants and agrees that the Shares will be to engage in a fund for of (sic) business this can generate from the investment.
• a commission of the investment.
• for a personal investment involved (sic) Real Estates (sic).
• will be used for a personal investment involving Real State (sic).

Sladich allegedly sent $400,000 to Brazil. “[A]ll of the property purchased was titled in the name of Sladich’s relatives, including her mother,” the SEC said.

The scheme began to collapse in early 2007, and Sladich fended off investors by instructing an employee to lie and by encouraging clients to “re-invest” their monthly payouts instead of cashing them out. By July 2007, she changed the rules to forestall disaster, the SEC said.

Sladich’s company — Kay Services LLC — upped the minimum investment in June 2007 from $3,000 to $12,000, and slashed the yearly payout from 100 percent to 50 percent, the SEC said. Recruiting commissions were eliminated.

Even though Sladich knew the scheme was collapsing, she continued to accept money, including $100,000 from one investor and $50,000 from another in September 2007, according to the SEC.

The scheme “finally collapsed” a month later. Investors then received a letter from an attorney that there would be no more payouts beyond principal “[a]s a result of unforeseen financial developments, including but not limited to volatility in real estate and other investment markets,” the SEC said.

Sladich, though, knew she was operating a Ponzi scheme and that the purported real-estate business generated no revenue, the SEC said.

“The October 2007 letter asked investors to execute an agreement, releasing the Defendants from liability in exchange for the return of their principal,” the SEC said. “Some of the investors executed the release but did not get a payment from the Defendants.”

Criminal charges and a guilty plea followed, and Sladich’s sentencing this week set up an interesting dynamic in the court room, according to the Record newspaper.

Now known as the Family Federation for World Peace and Unification, the Unification Church follows the teachings of the Rev. Sun Myung Moon.