A New Jersey Superior Court judge ordered suspended lawyer Michael Kwasnik and two others to pay $14 million in restitution for running a Ponzi scheme that defrauded scores of elderly investors in New Jersey and Pennsylvania between 2008 and 2010.

Authorities said Kwasnik ran the scheme through an investment company named Liberty State Benefits of Pennsylvania, based for a time in Philadelphia and Cherry Hill. He was assisted in the fraud by Joseph Schifano and Daniel Francis McCorry, authorities said.

The company told investors that it would use their funds to purchase the cash value of individual life insurance policies at a discount, a tactic known in the insurance world as a life settlement. Using that tactic, the company would be able to collect the full cash value of the policy, theoretically at a profit, when the policyholder dies.

But the New Jersey Bureau of Securities, which brought the complaint against Kwasnik, said his company never made any money and used new investment funds to pay off earlier investors.

"Michael Kwasnik sold or substantially participated in the offer and sales" of life settlement notes to at least 73 investors, according to the Thursday order by Superior Court Judge Thomas M. Moore in Newark.

Kwasnik began selling the life settlement investments in the depths of the financial market collapse of 2008 and promised annual returns of 12 percent.

His predations were first described in an Oct. 24, 2011, article in The Inquirer, in which elderly retirees described how Kwasnik and agents working for him promised lucrative returns, but found over time that the investment accounts they had entrusted to him had been emptied.

Although he had been sued periodically by disappointed investors, his legal difficulties intensified around that time. In November 2011, he was criminally charged with bilking a 96-year-old Cherry Hill widow out of $1.1 million. He pleaded guilty to those charges. Jail time was limited to the five months that he had been held at the Camden County Jail following his arrest.

He also was sued by then-New Jersey Attorney General Paula Dow, who accused him and others of orchestrating a multimillion-dollar Ponzi scheme. The lawsuit by Dow alleged that $5 million of $13.5 million raised by Kwasnik and others for Liberty State Benefits was paid to Kwasnik, his law firm, or members of his family.

One of the tactics ascribed to Kwasnik was to persuade gullible elderly investors to put their funds in an irrevocable trust and name him as trustee. He would then use his position as trustee to invest money in Liberty State without telling his clients.

Kwasnik, who now lives in Aventura, Fla., also faces criminal charges in Delaware. He could not be immediately reached on Friday for comment.

His law licenses in New Jersey and Pennsylvania have been suspended pending the resolution of various criminal charges against him.

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