Historic City News has learned from the office of United States Attorney Robert E. O’Neill, that 67 year-old Lydia Cladek who at one time lived in an oceanfront mansion at 189 Sea Colony Parkway in St Augustine Beach, has been convicted by jury on all counts of wire, mail fraud and conspiracy.
No surprise in the jury’s verdict and little consolation to her investors who lost millions of dollars with Lydia Cladek Inc. — the subprime automobile finance company that Cladek owned.
Cladek moved to St Augustine in 1994 then incorporated her finance company on January 2, 1998. At one point, Cladek had a staff of nearly 100 employees.
Some close to Cladek believe the company started legitimately — buying sales finance contracts from car dealers for customers who lacked the credit to obtain a traditional bank loan. Cladek would purchase the contract from the dealer at a discount, and collect the high-interest note from the borrower, or repossess and resell the vehicle. She needed cash to capitalize the contracts, so she turned to investors — offering them rates that were as much as double those available from certificates of deposit, retirement accounts, or other long-term investments.
By the time she built the Sea Colony home, four years later, her lavish lifestyle and conspicuous consumption were becoming legendary — as was her very public generosity for causes close to her.
Assistant US Attorney Jay Taylor convinced the jury that Cladek was a fraud; soliciting new investments simply to cover interest payments to her existing investors. The elaborate, high-dollar Ponzi scheme bilked some investors out of their entire retirement accounts that had been entrusted to Cladek’s care.
Lydia Cladek had been indicted on four counts of wire fraud, nine counts of mail fraud and one count of conspiracy. Sentencing should be within 90 days.