Mouths Agape At Latest Ponzi Scheme Arrest

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.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

The Trump Administration: What It Could Mean for Carried Interest

Jan 19 2017 | 5:25pm ET

The arrival of the Trump administration brings the potential for a repeal of the...

 

From the current issue of

The healthcare sector went on a tear beginning in 2011, thanks in large part to the passage of the Affordable Care Act and its impending implementat