033116 News for Pawleys Island, Litchfield and Murrells Inlet
Welcome to Coastal Observer

Home
Photo galleries
Obituaries
Send a Letter
Classifieds
Local Events
Ad Specs
Subscribe

THIS WEEK’S TOP STORIES

Crime: Ex-coach gets prison term for investor fraud

Former Pawleys Island resident Stanley J. Kowalewski has been sentenced to 18 years in federal prison for defrauding the investors in his former hedge funds and obstructing the U.S. Securities and Exchange Commission’s investigation into his activities.

“Investors trusted Kowalewski to invest their money as promised,” said U.S. Attorney John A. Horn of Atlanta. “Instead, he stole their hard-earned savings and repeatedly lied to them and the SEC about his investments and self-dealing. Incredibly, while on bond awaiting trial in the case, Kowalewski continued to defraud investors based on false promises relating to a new investment business that turned out to be just another scam.”

U.S. District Judge Richard W. Story sentenced Kowalewski, 44, to 18 years in prison with seven months’ credit for time served to be followed by three years of supervised release and ordered him to pay $9.4 million in restitution. Kowalewski was convicted on 22 counts of wire fraud, one count of conspiracy and one count of obstructing SEC proceedings.

Kowalewski was founder and coach of an AAU youth basketball team from Pawleys Island, the SC Gators. He was an assistant basketball coach at Waccamaw Middle School before his arrest.

Kowalewski was the owner and chief executive officer of SJK Investment Management in Greensboro, N.C. According to Horn and court testimony, Kowalewski solicited money in 2009 from pension funds, school endowments, hospitals, non-profit foundations and other investors which he placed in two “hedge fund of funds,” and an offshore fund called the Absolute Return Funds. Almost immediately after receiving the first investor money, Kowalewski began diverting the proceeds to pay for personal and business expenses, investigators said.

In December 2009, Kowalewski formed a new SJK fund called the Special Opportunities Fund. He diverted over $16 million from the Absolute Return Funds to the Special Opportunities Fund without notifying investors, according to testimony. Kowalewski diverted millions from the Special Opportunities Fund to himself through various transactions, prosecutors said, including having the Special Opportunities Fund buy three homes that Kowalewski owned and in which his family, his parents and his brother-in-law’s family lived. Kowalewski also bought a multi-million-dollar beach house on Pawleys Island. The six-bedroom, 5,000-square-foot home on the northern tip of Pawleys Island, known as “Nothin But,” was auctioned by the court-appointed receiver for SJK Special Opportunities Fund. Kowalewski paid $3.9 million for the three-story house at 105 Atlantic Ave. Kowalewski created and altered documents in an effort to make these transactions appear legitimate, Horn said.

Horn said Kowalewski overvalued the assets held by the Special Opportunities Fund and used those valuations to calculate the returns for investors in the Absolute Return Funds. As a result, the monthly statements distributed to SJK investors showed inflated returns. Investors lost over $11 million as a result, prosecutors said.

While on bond awaiting trial, Kowalewski defrauded investors in another company he controlled named Global Remediation Solutions, prosecutors said. Kowalewski was living in Pawleys Island when he was jailed Sept. 25, 2015.

[E-Mail Article To a Friend]


Buy Photo Reprints

ˆ€© 2016 Coastal Observer
Home | Photos | Obits | Classifieds | Local Events | Ad Specs | Subscribe