Former Cherry Hill Attorneys Charged In Money Laundering Scheme

A former New Jersey attorney who had offices in Cherry Hill and his father have been indicted for their respective roles in a $13 million Ponzi scheme, U.S. Attorney Paul J. Fishman said.

Michael W. Kwasnik, 47, of North Miami Beach, Florida, and William M. Kwasnik, 68, of Marlton, New Jersey, were indicted on Feb. 16, by a federal grand jury on three counts of wire fraud, two counts of mail fraud, one count of conspiracy to commit money laundering, and seven counts of money laundering. Michael Kwasnik was also charged with eight additional counts of transacting in criminal proceeds.

Michael Kwasnik previously owned and operated a law firm, Kwasnik, Rodio, Kanowitz and Buckley P.C. – and its successor firm, Kwasnik, Kanowitz and Associates P.C. – with offices in Cherry Hill and Philadelphia. William Kwasnik owned and operated an insurance company, Abby Grant, in Lakewood and Cherry Hill.

Between October of 2008 and November of 2011, they controlled a number of entities, including Liberty State Financial Holdings Corp. and its subsidiaries (Liberty State Benefits of Pennsylvania; Liberty State Benefits of Delaware; Liberty State Insurance Services; Liberty State Wealth Management; and Liberty State Credit) and Oxbridge Investors Fund; OPIS Management Fund; and Capital Management of Delaware, according to documents filed in the case and statements made in court.

Authorities allege they diverted funds from their clients’ trust accounts to themselves and their entities. They say Michael Kwasnik and others induced clients to establish various types of trusts based on misrepresentations and false pretenses.

Michael Kwasnik named himself as the clients’ trustee and directed clients to transfer their money, property and other assets into their trust accounts, authorities said. He then transferred the money out of the clients’ trust accounts and into accounts which he and his father controlled.

Altogether, authorities say they stole more than $13 million from more than 40 clients over the course of three years.

They laundered the funds through the entities they controlled and Abby Grant before ultimately using the stolen funds to pay for legal and operational expenses of the entities they controlled, the law firm, and personal expenses, authorities said.

Each count of wire fraud, mail fraud and money laundering carries a maximum penalty of 20 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. Each count of transacting in criminal proceeds carries a maximum penalty of 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense.