Law Review: Office of Attorney Ethics acted slowly in Kwasnik case

It has been almost two months since Philadelphia lawyer Michael Kwasnik was charged with stealing more than $1 million from an elderly Cherry Hill widow and accused in a lawsuit by New Jersey Attorney General Paula Dow of running a Ponzi scheme that bilked investors of many millions more.

What comes through most from conversations with the people in the New Jersey Office of Attorney Ethics is just how satisfied they are with the way they have handled this matter.

Kwasnik, according to the agency's own records, has been on its radar since at least 2006, with multiple allegations of fraud and misconduct. But it was only on Dec. 7, 2011, a month after his indictment, that the state Supreme Court, acting on a request by the OAE, temporarily suspended Kwasnik's law license. In the years that it took the agency to get to the point of acting, Kwasnik allegedly misappropriated millions in client and investor funds.

Winnie Comfort, spokeswoman for the New Jersey Supreme Court, which has authority in attorney ethics matters, said in an interview that the OAE would review its own handling of the matter and that no one from outside the agency would be involved.

She said she knew of no facts that suggest the office had mishandled the case.

"The attorney ethics system works well," she said. "This case was an anomaly. His license was suspended immediately once he was indicted. We will, if necessary, identify areas where we might do things differently. We do this all the time. It would seem that the attorney ethics office was the first office to even look at this guy."

None of the many allegations of fraud and misconduct against Kwasnik, who was indicted Nov. 7 on charges of theft and arrested in Alabama a few days later, has been finally adjudicated. The indictment is merely a charge, and if the case goes to trial, a jury will decide.

Kwasnik is still being held in the Camden County Jail, according to the Attorney General's Office.

One unavoidable conclusion, though, about the Office of Attorney Ethics is that it appears to have had numerous opportunities to resolve the many allegations against Kwasnik and potentially spare other Kwasnik investors and legal clients harm.

But it passed on those chances.

After receiving the initial complaints in 2005 - that Kwasnik used money from a client trust account to cover shortfalls in the business account of his law firm - it took the OAE three years to file a formal complaint on Dec. 18, 2008.