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Ponzi scheme hits Long Island, New York January 26, 2009

Posted by whitecollarcrimenews in News.
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This is really starting to get out of hand.  Arrests for Ponzi schemes are just exploding in the past few weeks.  It is actually getting a little boring, at least for me as it is an old scam and not a very creative one.  Nevertheless, I’ll continue to blog about the more interesting stories and since I’m in the NY media market, I feel compelled to discuss this one.

Authorities allege that Nicholas Cosmo, founder of Agape World Inc in Hauppauge. New York stole over $380 million from investors by using a Ponzi scheme.  He has a big problem as he is a convicted felon. 

In 1997, Cosmo was working as a stockbroker at Continental Broker-Dealer Corp. where he was accused of misappropriating funds. He pleaded guilty to a federal charge in 1999 and was sentenced to serve 21 months in prison.  Not only will this increase his exposure for sentencing but the Government may be able to use this prior conviction against him in what is known as 404(b) evidence.  As if his attorneys didn’t have it hard enough huh?

I’m sure there will be many reasons why it will be difficult for his attorneys to find legitmate excuses for his actions.  Besides his prior conviction, another one will be that he said Agape started in 1999 even though he didn’t get out of prison until 2000. 

Story is here.

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