{"id":6637,"date":"2015-10-22T15:23:52","date_gmt":"2015-10-22T19:23:52","guid":{"rendered":"https:\/\/www.shorebeat.com\/brick\/?p=6637"},"modified":"2015-10-22T15:23:52","modified_gmt":"2015-10-22T19:23:52","slug":"state-brick-man-was-part-of-8-6m-ponzi-scheme","status":"publish","type":"post","link":"https:\/\/shorebeat.com\/brick\/2015\/10\/state-brick-man-was-part-of-8-6m-ponzi-scheme\/","title":{"rendered":"State: Brick Man Was Part of $8.6M Ponzi Scheme"},"content":{"rendered":"
\"Gavel<\/a>

Gavel (Credit: Brian Turner\/Flickr)<\/p><\/div>\n

A state Superior Court judge has ordered the perpetrators of a Ponzi scheme \u2013 including a Brick man \u2013 to pay $8.6 million in full restitution for the benefit of defrauded elderly investors and $5.49 million in civil penalties.<\/p>\n

Superior Court Judge Thomas M. Moore, sitting in Newark, ordered Michael William Kwasnik, a suspended New Jersey and Pennsylvania attorney now residing in Aventura, Florida; Joseph Michael Schifano of Brick, a former registered agent of a broker-dealer; and Daniel Francis McCorry, formerly from Ventnor, now residing in Florida, also a former registered agent of a broker-dealer, pay the nearly $14 million.<\/p>\n

The ruling was handed down at the behest of the state Bureau of Securities. Schifano\u2019s share of the civil penalty is $920,000, the judge ruled, while all three defendants will share the $8.6 million in restitution.<\/p>\n

The court, according to the state attorney general\u2019s office, found that Kwasnik, Schifano and McCorry fraudulently offered and sold notes to 73 elderly investors on behalf of Cherry Hill-based Liberty State Financial Holdings Corporation through its subsidiary, Liberty State Benefits of Pennsylvania, that they falsely claimed to be \u201csafe,\u201d \u201csecure,\u201d and \u201cguaranteed\u201d a 12 percent annual rate of return. \u00a0Investors were also falsely told that funds raised by the sale of the three-year notes offered by the company would be used to purchase life insurance policies and beneficial interests in Irrevocable Life Insurance Trusts.<\/p>\n

In reality, investor funds were improperly used by defendants in a Ponzi scheme-like manner to pay existing investors with new investor funds and also transferred to the three defendants, members of Kwasnik\u2019s family, and a law firm Kwasnik controlled.\u00a0 The state\u2019s legal action was also filed against Kwasnik\u2019s father, William Kwasnik.<\/p>\n

\u201cElderly investors are increasingly the target of investment fraud due to the fact that they typically own tangible assets and pensions that are attractive to con artists,\u201d Acting Attorney General John J. Hoffman said.\u00a0 \u201cAll investors, and especially senior citizens who have built up their assets over time, must be extremely cautious when being offered investments that sound too good to be true.\u201d<\/p>\n

Schifano and McCorry were both disciplined by the state in 2005, under a securities enforcement action unrelated to the present case.<\/p>\n

\u201cAny \u2018guarantee\u2019 of an investment return, like the 12 percent annual rate of return promised to investors in this case, should be a clear warning sign of fraud,\u201d noted Steve Lee, Acting Director of the New Jersey Division of Consumer Affairs. \u201cInvestors should be careful that they don\u2019t buy into false and empty promises of risk-free investments.\u201d<\/p>\n

<\/div><\/div>","protected":false},"excerpt":{"rendered":"

A state Superior Court judge has ordered the perpetrators of a Ponzi scheme \u2013 including a Brick man \u2013 to pay $8.6 million in full restitution for the benefit of defrauded elderly investors and $5.49 million in civil penalties. Superior Court Judge Thomas M. Moore, sitting in Newark, ordered Michael William Kwasnik, a suspended New […]<\/p>\n","protected":false},"author":1,"featured_media":1912,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[3],"tags":[24,1721,1722],"class_list":["post-6637","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-police-fire-courts","tag-brick-nj-news","tag-joseph-schifano","tag-ponzi-scheme"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/shorebeat.com\/brick\/wp-content\/uploads\/2014\/11\/gavel.jpg","jetpack_shortlink":"https:\/\/wp.me\/pgt2Ft-1J3","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/posts\/6637","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/comments?post=6637"}],"version-history":[{"count":0,"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/posts\/6637\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/media\/1912"}],"wp:attachment":[{"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/media?parent=6637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/categories?post=6637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/shorebeat.com\/brick\/wp-json\/wp\/v2\/tags?post=6637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}