Posted Nov 07, 2011 02:13 pm CST
A Philadelphia lawyer who is a former Democratic State Assembly candidate has been accused of operating a Ponzi scheme in a civil lawsuit by the New Jersey Attorney General.
Lawyer Michael Kwasnik and other defendants are accused of using part of the money raised from newer investors in Liberty State Benefits to pay old investors, the Philadelphia Inquirer reports. The suit also claims Kwasnik helped raise $13.5 million from investors, but diverted about $5 million to himself, his law firm or relatives.
A statement by Kwasnik claims he was wrongly accused, the story says. “The Kwasniks state that the N.J. Bureau of Securities is wrong on the facts, wrong in their accounting and wrong on their application of the law,” the statement says. “The civil claims made are unsupported by the weight of the true evidence.”
Kwasnik is also named in a lawsuit by the bankruptcy trustee for the failed company, the Philadelphia Inquirer reported in a prior article.