Former Cherry Hill lawyer pleads not guilty in $13M Ponzi scheme
A former Cherry Hill lawyer accused of orchestrating a $13 million Ponzi scheme with his father pleaded not guilty Tuesday in federal court in Camden.
A former Cherry Hill lawyer accused of orchestrating a $13 million Ponzi scheme with his father pleaded not guilty Tuesday in federal court in Camden.
Michael Kwasnik, 47, of North Miami Beach, Fla., and his father, William, 68, of Marlton, were indicted on charges of wire and mail fraud, money laundering, and conspiracy to commit money laundering. William Kwasnik also pleaded not guilty Tuesday before Judge Karen M. Williams.
The alleged scheme targeted more than 40 clients of Michael Kwasnik's law firm between 2008 and 2011, when funds from the clients' trust accounts were diverted into accounts the Kwasniks controlled, authorities said.
The Kwasniks spent at least $10 million of the stolen money on office leases, car payments, credit card payments, and the cost of defending themselves in various lawsuits, among other expenses, according to court documents.
Richard Klineburger, Michael Kwasnik's attorney, said after Tuesday's hearing that his client was not a criminal and that this was a case of bad investments.
"He never stole any money," Klineburger said.
The Kwasniks appeared separately in front of Williams on Tuesday, acknowledged basic instructions and spoke little otherwise.
The firms Michael Kwasnik operated have closed: Kwasnik, Rodio, Kanowitz & Buckley P.C. and its successor, Kwasnik, Kanowitz & Associates P.C. He had offices in Cherry Hill and Philadelphia.
Prosecutors said Michael Kwasnik named himself his clients' trustee and told them to transfer money into their trust accounts. He and his father then laundered the money through entities they controlled — including Abby Grant, a Cherry Hill insurance company William Kwasnik owned — and spent it, authorities said.
Michael Kwasnik's law license has been suspended in Pennsylvania and New Jersey. He has faced similar charges in the past.
In 2011, he pleaded guilty to money laundering charges for bilking a 96-year-old Cherry Hill widow out of $1.1 million. Jail time was limited to the five months he was held at the Camden County Jail after his arrest.
In 2015, in a civil case, a judge ordered him and two other men to pay $14 million in restitution for running a Ponzi scheme that defrauded scores of elderly investors in New Jersey and Pennsylvania.
