Action News Investigates: Jacksonville's own Bernie Madoff

Cladek’s investors were offered the opportunity to “loan” money to her St. Augustine Beach-basded company, Lydia Cladek, Inc., in exchange for a promissory note from the corporation. The notes were secured by car notes that Lydia Cladek, Inc. had already purchased.

In some cases, the car notes used as collateral to investor notes had previously been assigned to four or five investors in the past. According to the F.B.I., in many cases, the car notes were then assigned to new victim investors, sometimes in as little as a week.

In addition to making false representations about the quality of the investors' collateral, Cladek used new investor funds to pay interest to old investors and to fund her lavish lifestyle, including three vacation homes in south Florida, each one valued at more than $1 million. By March 31, 2010, the existing performing car notes owned by Cladek had dwindled to just under $4 million, while the outstanding loans to investors exceeded $90 million.

Cladek was calculating with her charms. She researched her clients' interests, attended their churches and donated to their favorite charities.

Nancy Brantley invested thousands to help pay for cancer treatments. “I was very hurt,” said Brantley. “I just couldn’t believe a woman that would sit on my couch and hold my hand and say it’s going to be OK could be such a monster.”

“We were all of retirement age so it was very easy for us to do anything that she said,” said Jane Edney. “She was just so positive that she could help every single one of us.”

For those who were skeptical from the start, Cladek offered them an investment guide that put to rest any doubts. In black and white, you see the claims – “Has anyone lost money with Lydia Cladek, Inc.?” reads the headline. “No. The people who have loaned money to Lydia Cladek, Inc., have only made money with the company. Lydia has been working with private lenders since 1994 and everyone has been paid on time as agreed.”

For anyone with questions about her sweet deal – she addressed under the headline “Sounds too good to be true?" The booklet stated, "An offer that sounds too good to be true usually suggests little work and high returns. Not so with “Car Notes.” This is not a sophisticated business, but visit our offices and you will see it simply involves hard work and extreme diligence in every step of the process.”

Jane Edney lived just down the street from Cladek on Atlantic View Dr. “When I first invested with her she was already $20 million in debt,” said Edney.

By 2009, many of her clients were nervous about the payouts. The economy had tanked and checks were coming in late, and some weren’t coming in at all. Soon, someone picked up the phone and called the feds.

Even as federal investigators raided Cladek’s office in April of 2010, Cladek promised her clients that her business was on the up and up.

“I remember she lied to us right up to the very last minute,” said Edney.

During her September sentencing in U.S. Federal Court, Cladek showed no signs of remorse or responsibility. In fact, she adamantly denied stealing any money when she addressed the judge. “They did not prove that the money I withdrew came from investor funds,” said Cladek.

She’s a sociopath,” said another local investor. “She has no compassion, no ability to relate to other people and that’s what we saw in court.”

Another investor compared Cladek to an unconscious force of nature like a tornado. “I had a belief system with this person,” he said. “Suddenly there was this betrayal. If it was just a betrayal only in a material form, that would be one thing. It was a betrayal of spirit; it was a betrayal of the deepest core of trust.”

Cladek’s jail time is only a small victory for her victims who now have to focus on rebuilding their lives.

“I’m 81-years-old so you don’t get a job too easily at that age,” said Edney.

For others like Brantley, Cladek caused a world of pain beyond the deadly disease she was already fighting. “Hate, I can’t say that I hate her but she took my life away, really.”

Even with Cladek behind bars, there are still many unanswered questions about her operation. St. Johns county bankruptcy attorney, Nina LaFleur represents 53 former Cladek clients. LaFleur says only the F.B.I. could know where the millions she bilked went.

A forensic trustee appointed by the court attempted to trace the money. It’s reported Cladek transferred at least $20 million out of Lydia Cladek, Inc. to her personal bank account. But that money is not in any U.S. bank account. LaFleur and many of Cladek’s victims predict that money is sitting in an off-shore bank account.