Officials often act after damage done

For all the hardships of old age, Alfred Assaiante says he took comfort knowing that he planned to leave money to his church, his emotional bulwark.

He and his late wife, Adamary, had no children. They had worked hard, and in 1995, for her 80th birthday, Assaiante bought her a house in Ocean City, something she had long wanted.

When Adamary died in 2004, Assaiante decided to sell the small ranch house near the beach. He netted a handsome return, more than $400,000 over what he had paid.

That is when his accountant introduced Assaiante, 92, to Michael Kwasnik, an estates and trusts lawyer based in Philadelphia. Assaiante, a gangly, gentle man who often wears a bemused smile, says Kwasnik advised him in early 2008 to put his money in an irrevocable trust as a way to lower his taxes.

The trust document named Kwasnik as trustee, giving him total control of Assaiante's assets. Over the next six months, Assaiante wrote checks to the trust totaling $775,000.

And that, Assaiante says, is the last he saw of his money.

Kwasnik put the funds into Liberty State Benefits of Pennsylvania, an investment company run by his father and where he had served as corporate counsel.

The company, described by New Jersey Attorney General Paula Dow as a Ponzi scheme, filed for bankruptcy July 29. On Wednesday, Kwasnik was picked up on an arrest warrant in Alabama after he was charged in a four-count state grand jury indictment with stealing $1.1 million from an elderly Cherry Hill widow.

"He had all these schemes," Assaiante said in a Sept. 26 interview at his two-story Dutch Colonial on a leafy street in Merchantville. "He would try to explain it to me and go through these little diagrams and make me initial them. I said, 'I will listen, but I don't know what the hell you are talking about.' All I told him is that I wanted to protect my principal. I was in dread of losing my assets."

What Assaiante didn't know was that Kwasnik was already the target of multiple allegations lodged with the New Jersey Office of Attorney Ethics that he had misappropriated client funds.

In December 2008, two weeks before Kwasnik transferred $775,000 out of Assaiante's trust account and into Liberty State Benefits, the office filed its first ethics charges against the lawyer.