'Mini-Madoff' pleads guilty in fraud case
Source: Agencies |
October 31, 2010, Sunday
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A businessman nicknamed a "mini-Madoff" because he was arrested only weeks after the billion-dollar swindler, pleaded guilty on Friday to charges he orchestrated a US$413 million Ponzi scheme in the United States that victimized thousands of investors.
Nicholas Cosmo, 39, pleaded guilty to mail and wire fraud in US District Court on Long Island in a plea agreement with federal prosecutors. He faces up to 40 years in prison when he is sentenced in February.
Cosmo is the former head of the Long Island-based Agape World and Agape Merchant Advance in New York City.
Agape solicited investors to fund short-loans, called bridge loans, to help companies get temporary financing, and promised up to 80 percent returns, according to an indictment.
Cosmo admitted he used the investors' money for his personal investments in commodities futures trading, all of which tanked. Prosecutors found that much of the money paid back to investors was actually money provided by subsequent investors - a Ponzi scheme. Prosecutors estimate at least 3,000 investors lost more than US$195 million.
Cosmo had faced 22 counts of mail fraud and 10 counts of wire fraud. Friday's plea to one count of each settles the entire prosecution.
Unlike the more notorious Bernard Madoff, who admitted cheating charities, celebrities and institutional investors out of billions, Cosmo's victims were largely blue-collar workers, firefighters, police officers and military veterans.
Cosmo also spent 21 months in federal prison for a 1999 mail fraud conviction.
Nicholas Cosmo, 39, pleaded guilty to mail and wire fraud in US District Court on Long Island in a plea agreement with federal prosecutors. He faces up to 40 years in prison when he is sentenced in February.
Cosmo is the former head of the Long Island-based Agape World and Agape Merchant Advance in New York City.
Agape solicited investors to fund short-loans, called bridge loans, to help companies get temporary financing, and promised up to 80 percent returns, according to an indictment.
Cosmo admitted he used the investors' money for his personal investments in commodities futures trading, all of which tanked. Prosecutors found that much of the money paid back to investors was actually money provided by subsequent investors - a Ponzi scheme. Prosecutors estimate at least 3,000 investors lost more than US$195 million.
Cosmo had faced 22 counts of mail fraud and 10 counts of wire fraud. Friday's plea to one count of each settles the entire prosecution.
Unlike the more notorious Bernard Madoff, who admitted cheating charities, celebrities and institutional investors out of billions, Cosmo's victims were largely blue-collar workers, firefighters, police officers and military veterans.
Cosmo also spent 21 months in federal prison for a 1999 mail fraud conviction.
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