JACKSONVILLE, Fla. – A U.S. District judge sentenced a St. Augustine Beach woman to more than 30 years in prison for fraud. Lydia Cladek was will spend 30 years and four months in federal prison for conspiracy to commit mail and wire fraud, mail fraud and wire fraud. U.S. District Judge Timothy Corrigan ordered Cladek to pay more than $34 million in restitution.
A dozen of her victims told emotional stories in a federal courtroom for the sentencing hearing Thursday.
Karen Ewing always believed that if she worked hard and saved a little money, she could enjoy the fruits of retirement. But dreams of vacations on the beach with her family washed away.
“Now we are struggling to try to make insurance payments, deductibles and when medical procedures aren't covered, we can't afford them,” said Ewing.
Ewing is just one of hundreds of local investors who lost hundreds of thousands of dollars. Many were forced out of retirement, sold their homes, cars and one man sadly told the court he contemplated suicide.
In Cladek’s $100 million ponzi scheme, she bought sub prime automobile finance contracts from dealers at discounted prices. Cladek promised investors a sizable chunk of the income.
“As time went on, she would say this business is rolling like you can't believe. I am doing fabulous,” Ewing reflected.
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. 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.
More than 250 local investors never saw a dime. Sharell Holverson says Cladek was calculating, cunning and preyed on older women with savings. Holverson lost more than a million dollars to Cladek. The two met at church and Holverson fell for Cladek's kind heart and giving spirit. But now says she lost much more than her retirement savings.
“I completely lost my faith and close friendships through the church because of other people being victimized and leaving the church,” said Holverson.
Cladek showed no signs of remorse or responsibility throughout Thursday’s hearing. 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.
“I don’t blame a single person for what they have said,” Cladek said referring to the emotional testimony from victims. “It’s not me they’re talking about. The company was doing extraordinary things.”
Cladek’s attorney plans to appeal the sentence.