PHILADELPHIA — 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 Nov. 9, 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, N.J., 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, N.J. "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.
But since then, the agency has done little else. And in that time, other former legal and investment clients have come forward to say that Kwasnik, promising healthy returns, had taken their money and placed it with the now-bankrupt company.
It is a common complaint in fraud cases involving the elderly: Prosecutors, social service agencies and attorney regulators are often slow to act, and by the time they do, the damage is done.
"I don't think they (financial crimes against the elderly) are as simple in the relative sense as the more traditional financial crimes," said Lori Stiegel, senior attorney with the American Bar Association's Commission on Aging. "You are dealing with issues of capacity and different legal documents that some lawyers may not be all that familiar with, stuff you don't learn in law school."
The crimes are hard to prosecute and even hard to detect. The perpetrators typically hold positions of trust — a lawyer, investment adviser, accountant or close relative.
And many frail elderly people, like children, are unable to protect themselves. They may have little mobility or be unable to fully comprehend or explain what happened. A commonly voiced fear is that if they complain, the perpetrator will put them in a nursing home.
In many instances, the victims don't survive long enough to testify. Or if they do, their ability to recollect events may diminish.
Stephen Taylor, director of the New Jersey Division of Criminal Justice, which made the criminal case against Kwasnik, recalls one elderly victim who, as the trial date approached, declined sharply.
"We ended up having to plead the case because we couldn't risk" taking testimony from her, he said.
Complicating matters is the fact that police in many jurisdictions have never been trained in how to pursue these complex cases, and sometimes they have trouble even recognizing that a crime has occurred.
"Generally, prosecutors tend to shy away from things they are not comfortable with," said Steven Latzer, chief of staff and deputy district attorney in Montgomery County. "And traditionally, elder-abuse financial scams are something that prosecutors have not had a lot of experience with."
To many lawyers and social services officials, the lack of aggressive prosecution by law enforcement, attorney regulators and others is reminiscent of how cases of child and spousal abuse were handled in earlier generations.
There was little recognition of how widespread and serious the problems were, and prosecuting them wasn't a priority. And though the cases are often complex, with problems that range from declining physical and mental health to isolation, neglect and even tattered finances, no one agency or institution is in charge.
"These cases move through various systems — law enforcement, health care and judicial systems — and there is no one person responsible," said Mark Lachs, a nationally recognized geriatrician at Cornell University Medical School in New York.
Researchers have long suspected that for every reported case of financial abuse, a dozen or more go undetected. But in March, Lachs and a team of researchers released a study pointing to a much larger gap.
The study compared rates of self-reported abuse from a telephone survey of people older than 60 with cases actually reported to police, prosecutors and social services agencies.
When researchers compared the reported rate with the survey rate, Lachs and his colleagues concluded that authorities were likely handling only one out of every 46 cases of financial exploitation.
"We think this phenomenon (of underreporting) is far worse in the case of elder abuse," Lachs said, "because many people become socially isolated as they age, and their victimization is therefore more hidden."
How aggressively authorities pursue these cases varies widely.
In the Philadelphia region, district attorneys in Montgomery and Bucks counties regularly file charges for thefts of only a few hundred dollars. But Tasha Jamerson, spokeswoman for Philadelphia District Attorney Seth Williams, said that because of staffing constraints, the office declines in some instances to pursue cases of less than $50,000.
That policy was first disclosed by former District Attorney Lynne Abraham, who told City Council on May 5, 2009, that her office didn't have the staff to handle cases of lesser value. Victims could take their information to the police, she said.
That is just what Jonathan Kogen, a Great Barrington, Mass., psychologist did in 2004 when he began to suspect that Philadelphia lawyer and pension adviser Robert Welch had defrauded his 91-year-old mother, a nursing home resident, of several hundred thousand dollars.
Kogen said police told him to go to the district attorney's office, where he was told the loss was not enough to trigger a criminal investigation.
"They said it sounds shady, we will think about it," Kogen said. "But when I called back, he said, 'We can't do anything, there are much bigger cases that we are working on.' He made it sound like small potatoes."
The Philadelphia DA's office wasn't the only law enforcement agency that declined to act. Over time, the Pennsylvania attorney general, the U.S. Attorney in Philadelphia, the Internal Revenue Service and the Postal Inspection Service all had Welch under investigation, but brought no charges.
The financial consequences for the Kogen family were catastrophic.
Welch drained nearly $1 million from a trust account he had set up for Rose Kogen, pouring those assets into a money-losing medical device company he managed from his offices in Philadelphia.
After the family sued, Welch came under the scrutiny of the Pennsylvania Supreme Court Disciplinary Board, the agency that investigates attorney misconduct in Pennsylvania, and he was disbarred in 2008.
But by then, most of Kogen's money was gone.
A similar scenario has played out with Michael Kwasnik and his clients.
More than five years have elapsed since the New Jersey Office of Attorney Ethics officially opened its investigation of him on May 3, 2006. But there is still no hearing scheduled to determine the validity of the allegations and what, if any, sanctions should be imposed.
Kwasnik has denied acting unethically and has characterized the ethics complaints against him as the result of a commercial dispute with a bank he helped found. His criminal defense lawyer, Rocco Cipparone Jr., says his client denies violating any criminal laws and asserts that Kwasnik has successfully defended himself in civil lawsuits against charges similar to those in the criminal case.
Charles Centinaro, director of the office, declined to discuss the Kwasnik case in detail. But he said delays in attorney-ethics cases were inevitable, since lawyers accused of improprieties are afforded ample opportunity to clear their names.
Moreover, finding an ethics special master to hear the Kwasnik case had proved difficult, as had getting all the attorneys involved to agree to a hearing date.
"We're working as diligently as possible to get this matter scheduled," Centinaro said.
Meantime, client after client was coming forward charging that Kwasnik was misappropriating their assets, allegations that millions of dollars were missing.
And all the while, Kwasnik was signing up new clients.
Adeline Kasarda, 87, is a Medford, N.J., widow with a 47-year-old mentally disabled son. She says she hired Kwasnik to write a will in 2009 — after the attorney-ethics office filed its first charges. She said Kwasnik advised her to create a special-needs trust for her son with more than $550,000, setting aside a portion of that amount for her other adult children.
The money had come in part from an insurance settlement after the death of another son, at age 17, in a workplace accident in 1977.
Kasarda said Kwasnik promised annual returns of 12 percent. But she became suspicious when the company didn't send financial statements, and when one of her interest checks bounced.
After that, checks arrived erratically, until Liberty State filed for bankruptcy, when payments stopped altogether.
"He took advantage of me and others," Kasarda says.
Richard Lucchesi, 66, of Cherry Hill, and Clifford Frater, 88, of Ventnor, tell similar tales. Frater gave Kwasnik $800,000 in 2009. He says that Kwasnik invested much of that money in Liberty State Benefits without telling him.
Lucchesi, a Lockheed analyst, says he invested $60,000 in Liberty State Benefits in March or April 2010 after Kwasnik touted the company at a meeting in Lucchesi's home.
Now, Frater, Lucchesi and Kasarda face the prospect they may never get their money back.
Assaiante, a retired state communications worker, takes a fatalistic view of his investment. He grants that he would probably never have done business with Kwasnik if his wife had been alive; she was careful with money and would have been skeptical. Yet, he trusted Kwasnik because his accountant, the son of a friend, had recommended him. Even after Kwasnik failed to send account statements, Assaiante's reaction was restrained: Only once did he seek a lawyer's help and only then to get some records.
Last year, Assaiante says he was contacted by the New Jersey Bureau of Securities, which was probing Liberty State Benefits. Since the state was looking into the matter, Assaiante reasoned there wasn't much point in his doing anything else.
Now, he says his only concern is getting his money back so that he can give it to his beloved St. Peter Roman Catholic Church in Merchantville. He says his Social Security payments and his pension, which pay him about $40,000 a year, cover his modest living expenses, including the occasional trip to a nearby Olive Garden restaurant.
"What we are trying to do here," he said, "is get money back for the church."