Lydia Cladek signature worth $5 million

At the Federal Courthouse in Jacksonville yesterday, Historic City News reporter Kerry McGuire watched as U.S. Magistrate Thomas E. Morris decided to release St. Augustine Beach businesswoman Lydia Cladek — to the surprise and chagrin of many of her more than 1,000 investors who say they were bilked out of $113 million.

Most shocking to some of Cladek’s victims was that she was allowed bail of $5 million — secured only with her signature and own recognizance as bond that she will re-appear at her scheduled trial in February. At arraignment earlier this month, Assistant U.S. Attorney Jay Taylor expressed concerns that Cladek was a flight risk.

Cladek has been indicted by a federal grand jury on 14-counts; including charges of wire and mail fraud and conspiracy to commit fraud related to the operation of her business in an illegal Ponzi scheme. Cladek is facing 20 years in federal prison – on each count – as well as a $3.5 million fine.

According to the indictment, Cladek was the president and sole shareholder of an investment company involved in the purchase of high-interest retail installment contracts secured by motor vehicles. It is alleged that Cladek encouraged investors to loan money to her company to buy the high-interest notes at a discount. Cladek was supposedly guaranteeing investors a return of 15 percent to 20 percent on their money. Cladek is accused of using investors’ money to support her lavish lifestyle, to acquire luxury property, and to conceal her fraudulent use of the funds by making small payments to repay other investors.

Federal Public Defender Maurice Grant II is Cladek’s court-appointed attorney.

In addition to the signature bond, Judge Morris instituted “bond conditions” that govern Cladek’s release. 69 year-old Cladek has to live in St. Augustine with a 73 year-old widow who will act as Cladek’s “custodian” — a woman who the judge asked not to be identified because of “all the unhappy investors”.

During the time Cladek is under bond, she must:
-wear an ankle monitor 24 hours a day
-not travel outside St. Johns County
-not allowed to apply for a new passport
-not allowed to do any investment work
-have no contact with creditors, debtors, current or previous investors or employees

Cladek has entered a “not-guilty” plea and her trial will begin on February 7th.

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