|TRENTON – Acting Attorney General John J. Hoffman announced that Michael W. Kwasnik was sentenced today and ordered to pay restitution of $1.2 million for misappropriating funds from clients of his Cherry Hill law firm and laundering the money.
Kwasnik, 44, of Philadephia, was sentenced by Superior Court Judge Irvin J. Snyder in Camden to time already served in custody, taking into account the five months he served in the Camden County Jail following his arrest in late 2011. He was also sentenced to five years of probation. Kwasnik pleaded guilty on Jan. 29, 2013 to second- and third-degree counts of money laundering. The second-degree count relates to his misappropriation of $1.1 million from a 96-year-old client, who has since died. The third-degree count relates to his misappropriation of funds from a couple who received a personal injury settlement in a case handled by Kwasnik’s firm. The husband and wife, who were entitled to receive $324,000, previously recovered approximately $212,000 of the money.
Kwasnik was ordered under his plea agreement to pay full restitution to the victims, including the estate of the deceased victim, totaling about $1.2 million. Deputy Attorney General Denise Grugan prosecuted Kwasnik. Deputy Attorney General Grugan, Deputy Attorney General Peter Gallagher and Sgt. James Blong investigated the case for the Division of Criminal Justice Financial & Computer Crimes Bureau.
In addition to the criminal charges, the Attorney General’s Office previously filed a civil lawsuit charging Kwasnik, his father and other individuals with engaging in a fraudulent scheme in which 73 investors, most of them elderly, lost $8.5 million. The plea agreement that preceded today’s sentencing does not impact any potential criminal charges that could be filed relative to the alleged Ponzi scheme.
With respect to the elderly client, Kwasnik set up a family trust for the client and her children, and was also hired to help the client administer the estate of her deceased sister. In 2006, Kwasnik received about $1.1 million in checks from the estate, which he deposited into the trust account for clients maintained by his law firm. Kwasnik admitted he laundered those funds for purposes unrelated to the administration of the estate, including paying other clients and paying the operating expenses of the law firm.
In the other case, a married couple from Williamstown, N.J., hired Kwasnik’s firm to represent them in a personal injury lawsuit. Kwasnik’s partner successfully settled the matter for $485,000, which was deposited into the firm’s trust account. The couple was entitled to receive $324,118, representing the settlement amount minus attorneys’ fees and other costs paid by the firm. In pleading guilty, Kwasnik admitted transferring a large portion of the couple’s settlement proceeds to another bank account for his personal use, rather than remitting all of those funds to them. That account was frozen shortly thereafter, upon Kwasnik’s arrest in Dothan, Alabama, on Nov. 9, 2011, on a warrant obtained by the Division of Criminal Justice.
Kwasnik was managing partner of Kwasnik, Kanowitz & Associates, a law firm with offices in Cherry Hill and Philadelphia. Kwasnik specialized in estate and financial planning. On Dec. 6, 2011, after he was indicted, Kwasnik was suspended from the practice of law by order of the New Jersey Supreme Court. The Supreme Court of Pennsylvania suspended Kwasnik’s law license on Feb. 28, 2012.