White-Collar Crime

Lawyer takes state plea, will pay $1M to widow's estate; federal $8.5M Ponzi probe continues

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A New Jersey lawyer has pleaded guilty in state court to money laundering and promised to fully repay within five years the estate of the elderly widow he bilked of $1.1 million

Michael Kwasnik has also agreed to repay, before his scheduled May 10 sentencing, the client couple from whom he misappropriated a $112,000 insurance settlement, the Philadelphia Inquirer reports, relying on information provided by the state attorney general’s office.

In exchange, Kwasnik will serve no additional time, after spending five months in the Camden County Jail following his arrest.

Meanwhile, a federal investigation continues concerning a claimed $8.5 million Ponzi scheme targeting the elderly. Kwasnik has been accused by former clients and a civil suit filed by the New Jersey attorney general’s office of misappropriating money given to him to invest. He has not been criminally charged in this matter.

The state court plea agreement “does not in any way affect any potential criminal charges that would be filed in connection with the Ponzi scheme,” a spokesman for Attorney General Jeffrey S. Chiesa told the newspaper.

The article doesn’t include any comment from Kwasnik or his counsel. His law license was reportedly suspended in December 2011.

Related coverage:

ABAJournal.com (Nov. 2011): “Lawyer Accused of Operating Ponzi Scheme in Suit by NJ Attorney General”

ABAJournal.com (Nov. 2011): “Accused Philly Lawyer Is Arrested at Alabama Bus Station with Passport and Maps, Police Say”

NewJerseyNewsroom.com (Jan. 2012): “Former Cherry Hill lawyer Michael Kwasnik indicted for theft from clients”

Swartz Campbell Professional Liability Blog (Feb. 2012): “’A problem for attorneys, a problem for victims”

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