Nicholas Cosmo, the former owner and president of Hauppauge-based companies Agape World, Inc. (Agape) and Agape Merchant Advance (AMA), was sentenced today to 25 years of imprisonment by United States District Court Judge Denis R. Hurley in federal court in Central Islip. On October 29, 2010, Cosmo pled guilty to committing mail and wire fraud in connection with his operation of a massive Ponzi scheme 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.
The sentence was announced today by Loretta E. Lynch, United States Attorney for the Eastern District of New York.
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 either to fund short-term secured bridge loans to commercial borrowers, or used by AMA to make short-term loans to small businesses. Investors were told that the loans generated high interest rates which 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.
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