Head of New York firm accused of $400 million Ponzi scheme

http://www.iht.com/articles/2009/01/27/business/27cosmo.php

January 27, 2009

NEW YORK: U.S. authorities said on Monday that they arrested the chief executive of a private New York financing firm on suspicion of running an alleged Ponzi scheme that attracted $400 million in investments.

They said Nicholas Cosmo, head of Agape World on Long Island, was said to provide commercial bridge loans, but was instead operating a traditional Ponzi scheme in which early investors are paid with the money of new clients.

"Nicholas Cosmo took the advice of an attorney and complied with an arrest warrant," said Al Weissmann, spokesman for the U.S. Postal Inspection Service, which is investigating Agape World and Cosmo along with the FBI.

Another law enforcement official, said agents had visited Cosmo's office on Monday expecting to arrest him, but he was not there. He complied with the warrant on Monday night.

The amount of money, while large, pales compared with the alleged $50 billion fraud masterminded by the investment manager Bernard Madoff. But law enforcement officials say they expect to uncover more Ponzi schemes following the sharp decline of the U.S. financial industry.

Agape World, a private firm with its office in Hauppauge, New York, was not registered with the U.S. Securities and Exchange Commission.