The $25M Bounced Check

Mogul accused of bilking bank

Posted by the Asbury Park Press on 05/4/06

BY JAMES W. PRADO ROBERTS AND NANCY SHIELDS
STAFF WRITERS

*-- STORY TEXT **--ARTICLE BODY TEXT*FREEHOLD — In barely legible scrawl, real estate mogul Solomon Dwek wrote a check for $25,212,076.35 and motored to a drive-up bank window in Eatontown. He handed the check to a teller to deposit in another account he controlled.

The check was written on a closed account, the PNC Bank teller told Dwek at 2 p.m. April 24.

But Dwek told bank employees he had talked to their corporate office a few minutes earlier to have the account reopened. A wire transfer to cover his millions was occurring that very moment, Dwek asserted.

Reassured, the bank allowed Dwek, its customer of five years, to deposit the check.

At 8:51 a.m. the next day, Dwek wired away $23 million to pay off loans, using the $25 million deposit.

That's the way it happened, according to PNC. The bank says that was the last it saw of its millions.

After the bank's repeated requests for the money, Dwek came up with $2.5 million and $600,000 in more bad checks, according to PNC. When Dwek failed to show at two scheduled meetings with bank officials Wednesday, state Superior Court Judge Alexander D. Lehrer, sitting in Freehold, froze all Dwek's assets pending a court hearing May 12.

That leaves Dwek, who has an interest in more than 60 properties in Monmouth and Ocean counties and owns nearly 10 percent of Central Jersey Bancorp stock, unable to sell any of his assets. Dwek is 33, according to voting records, and lives in Ocean Township. He is the vice president of the Deal Yeshiva in West Long Branch.

"Defendant Dwek bilked PNC out of $25 million in a single day," PNC lawyer Dennis T. Kearney of Morristown wrote in court papers. "Dwek took advantage of his long-standing business relationship with PNC and defrauded the bank."

Dwek could not be reached for comment Wednesday. His lawyer, Michael B. Himmel of Roseland, said he had not seen the judge's order. The lawyer would only say he had been in communication with the bank.

Lehrer said the bank's petition to freeze Dwek's assets was a request to help "stop the bleeding."

"I'm preserving the status quo and giving Mr. Dwek the opportunity to come here and tell me if your position is accurate or inaccurate," Lehrer told Kearney at the hearing.

PNC said it intends to pursue Dwek's holdings to recoup its loss.

According to the bank's court filing, on April 25 Dwek used the bogus deposit to wire $20 million to HSBC Bank to pay a loan to "Franco & Dwek"; $2.2 million to HSBC to repay a loan that bank issued to "Ken Cayre"; $580,000 to Valley National Bank to repay a loan to "Horizon Export"; and $10,000 to Citibank to repay a loan to "Wiggin & Dana." PNC did not further describe the loans.

That afternoon, PNC said, Dwek deposited another bad check, this time for $25 million at a bank branch in Asbury Park.

PNC employees later reversed that deposit. When PNC contacted Dwek to tell him the second deposit would not be accepted, he "pleaded" for the check go through, the bank said in court papers.

"The thing most telling for us is that he tried to do the same thing with another $25 million at another branch," lawyer Kearney said.

Kearney argued in a court filing that Dwek took advantage of PNC's policy to make funds immediately available to customers when funds are transferred from one account to another.

The bank is suing Dwek, two of his companies — SEM Realty Associates and Corbett Holdings II — and unknown entities controlled by Dwek.

In court, Lehrer said he had rejected a telephone request from Dwek's longtime law firm, Ansell, Zaro, Grimm & Aaron, to delay the hearing.

Dwek is the largest shareholder of Central Jersey Bancorp and increased his ownership of the bank's stock to almost 10 percent last year, according to an SEC filing Dwek made in February.

Traded on the Nasdaq stock exchange, Dwek's holdings were worth $7.9 million Wednesday. His stock was also frozen by Lehrer's order.

The bank operates 13 Central Jersey Bank branches in Monmouth County and one in Ocean County.

Dwek was a director of the Long Branch-based bank until 2002.

"We've had no issues with him," said James S. Vaccaro, the bank's president and chief executive officer.

The Deal Yeshiva, where Dwek is vice president, is a Jewish religious education school that provides religious education for more than 300 students. According to the 2004 federal tax report the nonprofit organization filed in November, Dwek is the highest-paid individual at the school, earning $212,000 that year. The next-highest-paid employee was Dwek's wife, Pearl, who received $106,000 as a secretary.

The school, which has preschool through high school students and also offers postgraduate studies, reported $9.9 million in 2004 income.

According to an asset search PNC presented to Lehrer, Dwek owns or controls more than 60 properties in New Jersey. They include single-family homes, apartment buildings and townhouses, and vacant and occupied commercial properties.

One property Judge Lehrer froze is a vacant, two-story commercial building on Broadway in Long Branch. Dwek Properties LLC bought the building for $1.1 million on Jan. 6.

PNC said the Monmouth County properties are in Allenhurst, Asbury Park, Avon, Deal, Eatontown, Englishtown, Farmingdale, Freehold, Howell, Long Branch, Manalapan, Middletown, Neptune, Neptune City, Ocean Township, Red Bank, Roosevelt, Rumson, Shrewsbury, Tinton Falls, Wall and West Long Branch. Properties in Ocean County are in Barnegat, Brick, Lakewood, Stafford and Waretown, the bank said.

"He's been involved in all sorts of deals," said Long Branch Administrator Howard H. Woolley Jr. "He always seemed like a nice fella."

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