Records seized in Lydia Cladek investigation

Yesterday afternoon, Historic City News learned that FBI agents and state regulators seized the company records from the St. Augustine Beach offices of Lydia Cladek, Inc.

A search warrant was also served at Lydia Cladek’s home, located at 189 Sea Colony Parkway. The home is assessed at $1,879,126.00. The unpaid 2009 tax bill is up to $35,372.14 as of today.

Cladek is known around town by car dealers, bankers and private investors; some have watched, with mixed opinions, as she made a name for herself; a few years ago at a time when interest rates were much higher than they are today.

Cladek has two local business licenses, one for a professional association and the other as a mortgage broker. Since May 2002, Lydia Cladek, Inc. has been licensed as a sales and finance lender by the Department of Financial Regulation.

I spoke to one director and stockholder of a local bank who told me that Cladek was making loans when nobody else would. Of course, loans from Lydia Cladek, Inc. came with a price. The niche market at the core of Cladek’s business is point-of-sale financing for non-franchised, independent car lots. Many of these loans are secured with used cars and are originated by borrowers with less than perfect credit. Such sub-prime loans, known as “hard money” in the finance industry, have inherently higher risk and therefore command higher interest rates.

Investors attracted to Cladek in a market where they were earning as little as 6%, were reportedly promised returns as high as 16% to 18% for their money. Up until the past year, several investors who have been interviewed in the media have reported that their interest payments from Cladek came in every month or every quarter “right when they were due”.

Yesterday, in a televised report, St. Augustine Beach attorney Undine Pawlowski said that she has been following the investigation into Lydia Cladek, Inc. and has talked to a number of people who have money invested with Cladek’s company. “I know of complaints going back to February 2009,” said Pawlowski.

Pawlowski told reporters that she and her clients will consider their options — whether to pursue a civil claim or work with investigators.

Agents didn’t give the specifics of their investigation, but confirmed there is an ongoing probe into possible violations of Securities and Investment Laws.

At this time, no arrests have been made and no “cease and desist” order has been issued to Lydia Cladek, Inc.