Agape World chief Nicholas Cosmo turned himself in to authorities on Monday night after the FBI and U.S. Postal Inspection Service raided the Hauppauge-based investment firm’s headquarters earlier in the day.They said Nicholas Cosmo, head of Agape World Inc on New York's 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.
Agape chief Nicholas Cosmo is accused of scamming $380 million out of thousands of Agape World clients with promises of high returns that couldn’t be met.
The arrest warrant is expected to be unsealed Tuesday and sources said he would be charged with defrauding investors out of $380 million.
Agape, which once boasted it had 6,000 investors, now has about 2,000, after thousands of investors pulled out after the stock market collapsed in the fourth quarter.
"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.
Cosmo built the business by promising clients lofty returns on their investments and for years, they say, he delivered.
Until the end, Cosmo emphatically denied he did anything wrong. He spoke to Long Island Business News on Monday and deflected accusations that he was running a classic Ponzi scheme. He then vanished ahead of the FBI’s arrival.
Investors also showed up at Agape’s Motor Parkway offices, demanding to know why the company stopped making promised payments of principal and interest. On Friday, one angry investor punched Cosmo in the head while others crowded the hallway of the building. Cosmo needed a Suffolk police escort to safely get back to his Mercedes.
One broker owns a $2.7 million, 10-room house in Montauk, which he bought this summer, according to public records. Records also show he owns an apartment in Long Beach purchased for $850,000 in November 2006. The broker also owns a 2008 Bentley Continental and a 2008 Cadillac Escalade.
Another Agape broker owns a $400,000 Lamborghini, a 2008 Escalade and a 2008 Bentley, according to the DMV. That broker also bought a house in Huntington for $655,000 in January 2007. He also owns a condo in Miami.
Cosmo has history in scams, accused and found guilty In 1997 misappropriating funds while working as a stockbroker at Continental Broker-Dealer Corp. He was sentenced at the time to serve 21 months in prison and pay at least $135,000 in restitution. Agape World was founded in 1999.
Cosmo is currently wanted by the police, although some reports suggest that he may be about to hand himself in.
Agape World Inc, a private firm with its office in Hauppauge, New York was not registered with the U.S. Securities and Exchange Commission.
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