Nicholas Cosmo, Financier, Arrested In Purported $400 Million Ponzi Scheme

HICKSVILLE, N.Y. — The owner of a Long Island investment firm accused of cheating people out of more than $100 million is expected to appear in court Tuesday.

FBI spokesman Jim Margolin says Nicholas Cosmo surrendered at a U.S. Postal Inspection Service office in Hicksville on Monday night.

Cosmo runs Agape World Inc. in Hauppauge (HAW'-pawg). He's accused of taking in $300 million from investors and cheating them out of about $140 million.

A letter hanging in Cosmo's office window denies there was any Ponzi scheme, the type of fraud Bernard Madoff (MAY'-dawf) is accused of committing. A Ponzi, or pyramid, scheme promises unusually high returns and pays early investors with money from later investors.

Defense attorneys at the Herrick Feinstein law firm haven't returned telephone calls seeking comment.

Comments

[mrcontinental]

This is only the beginning. By late summer dozens more of these schemes will have been exposed.

[vagabondvet]

Agape World was a $300 million Ponzi scheme, for which Cosmo will justifiably be prosecuted. Bernie Madoff was on top of a $50 billion Ponzi scheme, for which he will justifiably be prosecuted. The Social Security Administration is at least a $30 trillion Ponzi scheme; who will be held accountable for this scheme?

[AlaninElkGrove]

China...

[ThomH]

But SS is NOT a Ponzi scheme. It is an intergenerational tax, with younger workers taxed for benefits paid to older retirees. It is stable except for the baby boom, which was accommodated in 1983 when Ronald Reagan and Tip O’Neill bumped up payroll taxes, accumulating the excess in a trust fund of US Treasuries.

Disinformation about SS is rampant. It will NOT go bankrupt when the trust fund runs out in 2042. Even the current overly pessimistic SS income projections would yield enough to pay more than today's retirement benefits, adjusted for inflation.

And very likely would pay in full the projected higher benefits then due. (Higher because benefits are tied to productivity, which grows faster than the CPI). Bush's SS Advisory Group annually spread the cry about bankruptcy, predicting in 2007 that only 75% of projected benefits could be paid in 2042. One year later, still crying, they upped the 2042 estimate to 78%.

If the projected shortfall continues to decrease by 3% per year, it will be gone by 2033. If not, there will still be plenty of time to fix the system with minor tweaks.

So quit spreading the falsehood that SS is in trouble. You've even got Obama believing it.

[uneeda]

will minor tweaks take care of the current 70 trillion in debt as well ?

[rabiddog6708]

Invest at your own peril. A fool and his money are soon parted.

[djgonebad]

These MORONS need to watch the movie- "The Grifters" and see what happens to CON-MEN. Don't they know- ALL PYRAMID SCHEMS COME TO AN END!!!

[ThinkLiberal]

I wonder how much time in the slammer this guy and others like him will actually get? I bet that it will be far less (that is, if he actually serves any time) than the kid on the corner who gets caught with a few ounces of weed. "Liberty and justice for all" - if you believe that, I have a shiny new bridge that I want to sell to you.

[tyger]

Okay ah what ever happened to audits? It's no wonder crooks came out the cracks and gutters to take people's money.

[Freenation]

No doubt reports will come he was also a big time charity giver too? Seems like all these crooks have this common trait, takes someones else money, donate to charity and get your self famous....

[kappa08]

Put him on the list....

[MIKEinNYC]

When someone runs a red light and causes a devastating accident do we clamor for more red light rules and regulations? No. The laws and rules about this offense are well defined and need to be vigorously enforced.

It's the same with this case and the Madoff case. Additional regulation is not the issue.The issue is ENFORCEMENT of existing rules and regulations.

[TXfemmom]

I fear that we shall hear of hundreds more of these, and let's face it, all of these derivatives and so-called investments at Citi, Merill Lynch, Goldman, Lehman, and all these others were ALL PONZI SCHEMES. Arrest all of the CEO's and others involved, including the Board of Directors and seize their assets under RICO.

[RRonin]

Since the company is named "Agape" I wonder if this was an attempt to swindle devoutly Christian investors. The word is used in many businesses that purport to operate on Christian principles. Of course, if they really did operate on Christian principles, they'd be out of business in no time.....

[cardtosser]

When you mix your faith with finance, your creed with credit, your investments with vestments, you run the risk of holy ruin.

[Topsailsman]

Gaze upon the beauty of unregulated markets.

[Ihaveadream]

The money people invested in various funds was real money from retirement accounts, sale of house, small business profits, and so on. Where did it go? As for these crooks - recyle the taxpayer's investment in GITMO and put these so called "white collar" crooks away in a lockdown on a balmy Caribbean isle and throw away the key.

[BCubedReg]

"Where did it go?"

It went to the lavish lifestyle these crooks lived. Maddoff is at home on house arrest in his $7,000,000­.00 New York penthouse. He tried to mail a million dollars in jewelry to his family members. These crroks took the money of their investors and live the life most can only dream of as they stole the future from their victims.

They should be buried under the jail, not jailed.

[cardtosser]

Madoff appearantly never bought a single share of stock in his fund. He used all of the money to enrich himself or to send dividends to his investors.

If he had bought stocks, the money would have disappeared. The way he used the money means there is more chance of some recovery then if he had invested in Merril.

[Tiggy]

As the Republicans say, "we need less regulation"! That's right, see where we are today, let's just deregulate and let the market work. Trickle down will happen, you just wait and wait and wait. What we really need to do is punish these perpetrators by leaving them absolutely penniless. Slapping them on the wrist and incarcerating them for a year or two is no punishment because they are still rich when they get out. Let's push Government to hit these people where it hurts, their wallet. That is the best deterrent.

[gruyere6]

put him in a closet w srah palin

[brighterlight]

hee....hee­.... hee

[Mark701]

No, that would be cruel and unusual punishment.

[jeffp26]

Actually that is my definition of torture.