BUSINESS
08/14/2009 05:12 am ET | Updated May 25, 2011

Down, Not Out: Scammed By A Mini-Madoff

Last year Terry DiFranzo started a part-time job at a Target near her Vero Beach, Fla. home, "just to have something to do." DiFranzo, 65, told the Huffington Post that she roams the food section for $8.10 an hour, making sure items for sale haven't passed their expiration dates.

But after she and her husband lost all their money in a busted Ponzi scheme that promised too-good-to-be-true returns, the job is no longer a lark. Said DiFronzo: "Before it was a fun job and now it's turned into where it's got to be done."

From June to December last year she and her husband invested first $25,000, then $50,000, then $300,000 in Agape World, a bogus bridge-loan business run by Nicholas Cosmo of Long Island. Now approximately 1,500 investors are out $380 million and Cosmo is in jail on mail fraud after being arrested in January.

As the economy receded, "mini-Madoffs" like Cosmo popped into view like barnacles on a pier, but they haven't held national media attention. The amount Cosmo is alleged to have defrauded his investors is a pittance compared with the $64 billion convicted felon Bernard Madoff bilked out of his 15,400 investors. While the collective plight of Madoff victims is affirmed in the news every day, Cosmo victims rely on each other, largely via email and a blog maintained by Dominick DiColangrea of West Babylon, N.Y.

"The media has neglected this group of victims to a great extent," said DiColangrea, who told the Huffington Post he lost $230,000 to Cosmo. "For the most part, the Madoff victims, they've worked for the attention they've got. Every time there's been a court hearing, they've gathered in numbers. The victims here seem reluctant to do the same."

DiColangrea said he wished Cosmo victims were out protesting Bank of America, which victims allege in a civil suit was working so closely with Cosmo that the bank actually used an office adjacent to the Agape board room.

While Madoff investors may be eligible for up to $500,000 from the Securities Investor Protection Corporation, the government-chartered fund that compensates clients of failed brokerage firms, Cosmo's fraud wasn't a brokerage, so his victims will have to get in line to maybe get a portion of whatever assets the bankruptcy trustee is able to recover.

Several Agape victims contacted the Huffington Post when DiColangrea put the word out that a reporter was interested in hearing their stories.

"I was gonna use that interest money. I was gonna renovate my house. I was gonna give some to my kids. It was gonna be sweet," said Paul McGirr, a building maintenance man who lives in Queens. "I went from having a little stash for retirement, to barely nothing. I had plans. Now it's struggle time."

"I invested with Agape like a schmuck," said Roy DeSetto, a retired cop and construction worker in New York. "I knew it, I knew it, I knew it, but I saw everybody get money. So I said, let me try it. Soon as I did in August, that's when they started investigating."

DeSetto, 59, said he gets disability retirement payments. But after the bad investment, he said his wife has gone back to work full-time as a nurse. "There's no publicity," he said. "I get pissed."

Terry DiFranzo said she's gone to the local church for help with utility bills, and that the situation has been especially hard on her husband.

"My husband had been diagnosed with Alzheimer's and medically he'd just been going downhill. Now he's got an ulcer from everything and his liver's gone wacko," she said. "We lost everything we had. We didn't save nothing back."