In what is thought to be one of the largest sentences given to a female Ponzi schemer, a Florida woman was sentenced to spend the next thirty years in prison for masterminding a $100 million Ponzi scheme. After being convicted earlier this year of fourteen counts of wire fraud, mail fraud, and conspiracy, United States District Judge Timothy Corrigan handed down his sentence to Lydia Cladek, 68, noting that she showed no remorse to the hundreds of individuals she victimized. Cladek remained defiant until the end when, given a chance to address the court, she maintained that "I took nobody's funds...I'm innocent. I will not quit until I prove it."
Cladek was indicted in November 2010, charged with operating her investment company as a $100 million Ponzi scheme. According to authorities, Cladek was the president of Lydia Cladek, Inc. ("LCI"), which purportedly purchased high interest automobile retail installment contracts with investor funds with the promise of a hefty annual return of 15% - 20%. In an effort to connect with older and elderly women, Cladek was known as an avid churchgoer and animal lover, who would often sip tea at social events. Those who invested would receive a promissory note supposedly secured by the vehicles and other car notes as collateral. A prosecutor estimated Thursday that $112 million was invested in the company between 2003 and 2010.
However, instead of operating a legitimate operation, authorities accused Cladek of operating a massive Ponzi scheme that used investor funds to pay others fictitious returns. Additionally, Cladek was accused of using investor funds to support her lavish lifestyle, which included multiple houses, diamond earrings, several paintings, and a baby grand piano. After being indicted on fourteen charges, Cladek refused to plead guilty, and instead chose to stand trial. The strategy backfired, as a federal jury convicted her of all fourteen counts.
News coverage of the sentencing indicated a concerted efforts by victims to convey the destruction brought by Cladek's fraud, many who lost their life savings. One woman suggested to Judge Corrigan that "I hope she goes to jail until hell freezes over," while another likened the Cladek's actions to "rape." Attorney Nina La-Fleur, who represented a large amount of Cladek's victims, indicated that the victims were pleased with the sentence.
Both the magnitude of Cladek's Ponzi scheme and her sentence easily gains her the distinction as one of the worst Ponzi schemes perpetrated by a woman. A review of Ponzi schemes in the past few years shows that while women do account for a small percentage of schemes, as evidenced here, here, here, here, and here, the amount of investor losses in Cladek's scheme dwarfs those schemes.
A copy of Cladek's indictment is here.
For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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