Joseph Dwek's April 2006 fraudulent conveyance
Posted by the Asbury Park Press on 05/10/06
BY JAMES W.
PRADO ROBERTS
STAFF WRITER
Real estate mogul Solomon Dwek used $60.2 million of his uncle's money to buy 129 residential and commercial properties since 2003 but didn't put the properties into his uncle's name as promised, the elder Dwek claimed in court papers filed Tuesday.
Joseph Dwek of Brooklyn said his nephew does not rightfully own the New Jersey properties and asked a Superior Court judge to change his order that froze all of Solomon Dwek's assets last week.
Judge Alexander D. Lehrer, sitting in Freehold, issued the order after PNC Bank accused Solomon Dwek of bouncing a $25.2 million check he had written April 24. The next day, Joseph Dwek said, he demanded that Solomon Dwek put the properties in his name.
PNC said it is still owed $20 million on the check Dwek deposited at a drive-through teller window in Eatontown.
Joseph Dwek claimed that he thought Solomon Dwek had placed the $60.2 million worth of properties in his — Joseph's — name. Instead, the properties were either in the younger Dwek's name or corporations that he controlled, according to court papers.
The arrangement between the two Dweks became so complicated that not even Solomon Dwek could determine last month which properties were his and which belonged to his uncle, according to the court filing.
"Because of the magnitude of the real estate portfolio Solomon had amassed, using both my money and his own, it was impossible to determine precisely which properties Solomon purchased with my funds," the elder Dwek stated in court papers. "Solomon was never intended to have any ownership interest whatsoever in those properties."
A three-year spree
The buying spree apparently began in spring 2003 for the elder Dwek, an executive of the Adjmi Apparel Group in New York, a major manufacturer and importer of brand-name children's clothing.
At that time, the Dweks agreed that the nephew would locate and buy properties in New Jersey that his uncle would pay for, either to produce rental income or to sell for a profit.
Joseph Dwek stated that in exchange for Solomon Dwek's efforts, his nephew could manage the properties and his uncle would then make charitable contributions to the Deal Yeshiva, a private school, where Solomon Dwek, 33, is listed as vice president.
Since 2003, Joseph Dwek stated, he has donated approximately $2 million to the yeshiva. The yeshiva claimed $9.9 million in income in 2004. Solomon Dwek and his wife were paid $318,000 in salaries from the school that year.
But the elder Dwek, 54, who owns a summer home in Ocean Township on the same street as Solomon Dwek, said he didn't learn until April that his nephew put the properties in his own name and companies.
Not only did Solomon Dwek not put the properties in his uncle's name, he failed to use the money to buy some properties they had agreed upon, the uncle claimed. One of those properties was the exclusive 18-hole Deal Golf Club, which the uncle claimed was one intended use of an $18 million line of credit he took out in September.
Separately Tuesday, a former partner of Solomon Dwek's, Charles Ishay of Brooklyn, accused Solomon Dwek in court papers of taking $5 million Ishay had given him in April to buy the club. But Dwek later told him the money was used to buy properties in Tinton Falls and elsewhere, Ishay claims.
Golf club not for sale
William C. Barham, the Monmouth County freeholder director and a former member and president of the club's board of directors, said Tuesday that "Solomon Dwek's group" was one of five buyers interested in buying the club.
"But there never was a deal to be made," Barham said. "Members didn't want to sell the club."
Solomon Dwek's reach goes far beyond Monmouth and Ocean counties, where most of his properties are held. Properties elsewhere are worth millions, including $6.5 million in land in Raleigh, N.C., and various parcels in Ohio and Delaware, according to a search of property records.
But those figures are dwarfed by what Joseph Dwek claims he gave his nephew.
From April 2003 through August 2005, Joseph Dwek stated that he wired $10.2 million to his nephew's company, SEM Realty Associates, to pay for the location and purchase of properties. And in August and September, Joseph and his wife, Terry, obtained two credit lines of $25 million and $18 million from HSBC Bank to buy more properties.
"Based on Solomon's confidence that he would continue to acquire lucrative properties on my behalf and my promise of continued financial support of the Deal Yeshiva," the uncle states, Solomon agreed to pay the monthly interest on the second HSBC line of credit, the uncle said.
The uncle wired another $7 million to SEM in March.
Juggling funds
According to PNC Bank, it funded SEM with the $25.2 million check and the next morning Dwek wired out $23 million to pay off loans before the bank realized the check was bad. PNC said Dwek used $20 million of that to pay off a single loan from HSBC Bank.
On the same day, April 25, the uncle stated he demanded that Solomon Dwek put the properties into his name, and he then threatened to sue his nephew. The two eventually signed agreements that would give the uncle the ownership of 15 properties and interest in 41 limited liability companies that owned 114 other properties.
On May 2, the 15 properties Solomon Dwek owned individually were transferred to the uncle's company, Yeshuah LLC, for $1 or $10 each, but most were not publicly filed until days later.
By May 3, Judge Lehrer had frozen all of Solomon Dwek's assets, including the properties Joseph Dwek claims are his. On Tuesday, PNC said in court papers that the Yeshuah transfers violated the judge's freeze order.
The uncle said his lawyer sent a letter to Solomon Dwek on Friday demanding he ask Lehrer to lift the freeze order.
"To my knowledge, Solomon has not taken any steps toward that end," the uncle claimed.
Solomon Dwek has not responded to PNC's claims or the judge's order. Dwek's new lawyer on the matter, Robert A. Weir Jr. of Red Bank, could not be reached for comment.
