‘Mini-Madoff’ Nicholas Cosmo Gets 25 Years For Ponzi Scheme
Nicholas Cosmo, the former owner and president of Long Island-based companies Agape World, Inc., and Agape Merchant Advance, who has been referred to as the “Mini-Madoff,” has been sentenced to 25 years in prison by U.S. District Court Judge Denis R. Hurley. Cosmo had pleaded guilty to committing mail and wire fraud in connection with his operation of a massive Ponzi scheme (massive, that is, for Ponzi schemes other than the Madoff fraud) involving the theft of more than $195 million of investor money that was supposed to be used to fund short term commercial loans. Cosmo was ordered to pay $179 million in restitution to more than 4,000 victims and agreed to an asset forfeiture judgment in the amount of $409,305,000 as part of his sentence.
According to prosecutors, Cosmo and others working at his direction fraudulently obtained in excess of $400 million from investors over a five year period by representing that the funds would be used by Agape World either to fund short term secured bridge loans to commercial borrowers, or used by Agape Merchant to make short term loans to small businesses. Investors were told that the loans generated high interest rates that would result in payment of high rates of return on their investments. Cosmo often failed to make the short term loans, admittedly using approximately $80 million of investor money to trade futures and commodities unbeknownst to investors, and paid false profits to early investors in the scheme using new investors’ money.
At the sentencing proceeding several victims, many of whom stated that they lost their family’s life savings, described the devastating effect of their losses as a result of Cosmo’s criminal actions.