Wednesday, 29 June 2016
Last updated 2 hours ago
Jan 28 2009 | 2:10am ET
On a day that saw one accused Ponzi schemer turn himself in after two weeks on the run, the avalanche of fraud cases continued to grow with the arrest of another on Long Island.
Nicholas Cosmo of Hauppauge, N.Y.-based Agape World Inc. was arrested Monday and charged with defrauding investors of more than $370 million. He was arraigned on mail fraud charges in federal court in Central Islip, N.Y. He was order held in jail until tomorrow, when his lawyers will respond the criminal complaint and a bail hearing will be held.
According to prosecutors, Cosmo ran his Ponzi scheme from October 2003 until last month. Over the years, he had more than 1,500 investors, U.S. Postal Inspector Richard Cinnamo said in a 51-page affidavit.
Cosmo allegedly told his investors that his fund made bridge loans, offering big returns with little risk. In fact, he made less than $10 million worth of loans. He invested some $100 million in commodity futures, losing about $80 million, according to Cinnamo. Meanwhile, he allegedly paid recruiters—many of whom are ex-convicts—$55 million, and used more than $600,000 of it on personal expenses, including $212,000 to pay court-ordered restitution from a 1999 conviction on charges he misappropriated funds while working as a stockbroker. He was sentenced to 21 months in prison and order to undergo “extensive gambling therapy.”
Cosmo also allegedly invested $300,000 in an independent minor-league baseball league, and used $100,000 on expenses such as hotel and limousine bills.
If convicted, Cosmo faces up to 20 years in prison.