25 Million Dollar Bounced Check Part Of Bigger Fraud?
The case of the 25 Million Dollar Bounced Check by Solomon Dwek in New Jersey is getting more and more interesting. Instead of just being a funny story, it is unraveling into a horror story of real estate fraud and deception and could create a 20 million dollar loss for PNC Bank. By failing to follow proper procedures by letting Dwek wire money PNC Bank may now have to absorb the loss if they can not get the money back. A judge has put a hold on the assets of Solomon Dwek but the properties that he claimed he owned may instead be owned by an Uncle, Joseph Dwek, “who is asking Superior Court Judge Alexander D. Lehrer to unfreeze the assets because “Solomon was never intended to have any ownership interest” in the disputed properties.”
As Solomon Dwek repeatedly promised to pay PNC Bank for what it says was a $25.2 million bounced check, the real estate mogul attempted to transfer at least $40 million in properties, most to an apparent relative, according to public records.Only 11 of 53 transfers went through, and they are in jeopardy because of an order issued by Superior Court Judge Alexander D. Lehrer that froze Dwek’s assets until at least Friday. The judge will hold a hearing then to determine the future of Dwek’s holdings.
PNC Bank said Dwek owes it $20 million for the April 24 bounced check, and the bank had asked for Dwek’s assets to be frozen until it’s paid.
The bank wanted to settle the matter without going to court, but Dwek, 33, of Ocean Township, missed two meetings on May 3 with PNC attorney Dennis Kearney, the lawyer told the judge last week.But beginning May 1, two days before the meeting, the clerks’ offices of Ocean and Monmouth counties began to receive the first of what would be dozens of legal notices stating that various Dwek properties would be sold, primarily to a Joseph Dwek. Solomon Dwek has an uncle named Joseph Dwek who owns a summer home in Ocean Township and lives in Brooklyn. via Asbury Park Press Online.
Update: The Jersey Shore Real Estate Bubble Blog has an interesting post on this, and a link to a site that can show you the properties in question. It looks like Solomon was pulling scams on his family and the bank. What was he thinking?
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Comment by c'mon on 11 May 2006:
There may be no express scam against his family here, just a ploy to limit the extent of what PNC can grab.
I mean, a family insider comes along and says, “Hey, Judge. Unfreeze the asstes, they’re really mine. Yeah, yeah, don’t mind the deeds and equitable and legal title. You see, I gave my nephew $50m to buy the assets. We had an agreement, yeah, you know …”
Judge: “OK, where’s the agreement?”
Uncle: “You know, a gentlemen’s agreement, like back in the good ol’ days.”
Judge: “Motion denied. You need a signed writing for any agreement to purchase land. It’s called the Statute of Frauds and it goes back to inception of property law in merry old England. Please don’t let the door hit you on the way out.”
I’m still surprised that three creditors haven’t come along and put the young man and his entities into bankruptcy. That would be a huge blow to PNC b/c they’d be unsecured schmos, with a real chance to lose. (Tangentially, I read HSBC returned the $23m Dwek wired immediately after he kited the check, which would change the picture.)