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Tag: Paula T. Dow

  • UPDATE: Philadelphia Attorney Alleged To Be New Jersey Ponzi Schemer And Thief Arrested In Alabama With ‘Passports And Maps’

    Booking photo: Michael W. Kwasnik. Courtesy of Dothan, Ala., Police Department.

    UPDATE: Police officers in Dothan, Ala., arrested Philadelphia lawyer and accused New Jersey thief and Ponzi schemer Michael W. Kwasnik yesterday at the Greyhound bus station in Dothan, according to a statement issued by Dothan police Chief Gregory J. Benton.

    Kwasnik was found in possession of “items essential for out of country travel such as passports and maps,” Dothan police said.

    Police said Kwasnik came to their attention at the bus station after officers received an “anonymous tip” that two persons “may be attempting to transport narcotics.”

    When officers arrived, they found no narcotics — but discovered Kwasnik was wanted in New Jersey on charges filed earlier this week.

    Kwasnik is being held for New Jersey authorities, Dothan police said, noting that Kwasnik “stated he had no intentions of fleeing and desired to return home to face charges of which he maintains innocence.”

    Profile booking photo: Michael W. Kwasnik. Courtesy of Dothan, Ala., Police Department.

    Kwasnik will be held in Alabama until “extradition is arranged as a Fugitive from Justice,” Dothan police said. He was charged criminally and sued civilly earlier this week by New Jersey Attorney General Paula T. Dow.

    Kwasnik was accused criminally of stealing more than $1 million from an elderly woman for whom he was performing trust services.

    Separately, he was sued civilly amid charges he was part of an $8.5 million Ponzi scheme that targeted senior citizens.

    Stephen J. Taylor, New Jersey’s director of criminal justice, said Monday that Kwasnik was 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.”

    Dothan police did just that after finding Kwasnik in the Alabama city.

    See earlier story.

  • 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.

  • MLM Firm Credit USA Inc. Hammered By State Attorneys General Amid Pyramid Scheme, Securities Allegations; Terrel Alexander, Nicole Alexander, William Love III Indicted

    UPDATED 3:07 P.M. EDT (U.S.A.) State prosecutors in Delaware and New Jersey have lowered the boom on an alleged multilevel-marketing (MLM) pyramid scheme known as Credit USA Inc.

    Credit USA purportedly sold credit-repair and “identity protection” services, and operated the company to enrich three criminal defendants unjustly, prosecutors said.

    Criminal indictments were handed up in Delaware against Terrel Alexander, 41, of Wilmington, Nicole Alexander, 41, and William Love III, 39, of Mount Laurel, N.J. The criminal charges were brought by the office of Delaware Attorney General Beau Biden.

    Among the charges were racketeering, conspiracy to commit racketeering, securities fraud, theft, selling unregistered securities and conducing business as unregistered brokers or agents.

    Meanwhile, New Jersey Attorney General Paula T. Dow sued the company and Terrel and Nicole Alexander amid allegations of selling unregistered stock and transacting in securities without being registered. Nicole Alexander is the ex-wife of Terrel Alexander.

    “We’re taking action on behalf of the investors who suffered losses when these defendants allegedly broke our state securities laws,” Dow said.

    New Jersey officials estimated that “at least 100 investors” paid Credit USA for “shares” in the firm.

    Part of the scheme was to entice prospects to purchase shares priced between $7 and $15 “before the company goes public on the stock exchange,” prosecutors said.

    Credit USA sold at least 28,000 shares of unregistered stock to at least 100 investors who forked over more than $125,000, prosecutors said. The scheme was selling shares as recently as September 2009, according to court filings.

    Shares were sold in “lots” of 100 to members, associates and “proposed officers” of the MLM firm, prosecutors said.

    “The investors included people who had paid to become ‘members’ of Credit USA and ‘associates,’ members who had paid an additional fee that allowed them to sell Credit USA services to others,” New Jersey officials said.

    “I applaud the coordination among the states to thwart this operation,” said Marc B. Minor, chief of the N.J. Bureau of Securities. “Credit USA’s sale of unregistered stock highlights the public’s need to be more vigilant and to check with the Bureau before investing in order to avoid being victims.”

    Authorities said Credit USA was headquartered at Two Penn Center Plaza in Philadelphia from August 2005 to May 2007. Beginning in June 2007, Credit USA operated at One Cherry Hill, Suite 400, Cherry Hill, New Jersey. The company was registered in Delaware.

    Beau Biden, the Delaware attorney general, is the son of U.S. Vice President Joseph Biden. The younger Biden only recently returned to duty after suffering what was described in May as a minor stroke.

    One of Biden’s first official duties after returning to work was to announce the indictments against the Alexanders and Love III.

    If convicted of all counts in the criminal case, the defendants each face up to 76 years in prison.