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Investor Cosmo gets 25 years in jail for $400 million Ponzi scheme

By Agence France-Presse
Saturday, October 15, 2011 8:14 EDT
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A US federal court on Friday sentenced a New York-based man to 25 years in prison after he admitted stealing more than $195 million from thousands of investors in a $400 million Ponzi scheme.

Nicholas Cosmo — who ran two New York investment companies, Agape World Inc. and Agape Merchant Advance — was ordered by US District Court Judge Denis Hurley to pay $179 million in restitution to his victims.

Cosmo had pleaded guilty in October 2010 to mail and wire fraud in connection with the operation of the Ponzi scheme over a five-year period, federal prosecutors said. He was ordered to forfeit $409.3 million in assets.

“Those who lie and steal from the investing public are on notice that they face severe penalties,” US Attorney Loretta Lynch said in a statement, adding Cosmo’s actions had “crushed the hopes and dreams of everyday citizens.”

“We stand committed to ensuring that our markets operate fairly and honestly, and we will aggressively investigate and prosecute those who fraudulently enrich themselves at the expense of investors,” she said.

Cosmo told his clients the money would be invested in short-term commercial loans, prosecutors said. Instead, he traded futures and commodities without telling his investors, and paid early investors using new investors’ money.

Several victims testified at the sentencing hearing in federal court in Central Islip, New York. Many of them said they had lost their family’s life savings.

The case bore similarities to that of Wall Street fraudster Bernard Madoff, who was sentenced in June 2009 to 150 years in prison after taking tens of billions of dollars from clients over a period of more than 20 years.

Agence France-Presse
Agence France-Presse
AFP journalists cover wars, conflicts, politics, science, health, the environment, technology, fashion, entertainment, the offbeat, sports and a whole lot more in text, photographs, video, graphics and online.
 
 
 
 
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