Nicholas Cosmo, whose $405-million Ponzi scheme bilked more than 4,000 people, many of them on Long Island, was sentenced Friday to 25 years in prison by a federal judge who castigated him for swindling people of "modest backgrounds" out of money that was "the product of years of hard work," including children's college and retirement funds.
Cosmo, 40, of Lake Grove, who became known as the mini-Madoff, also was ordered by U.S. District Judge Denis Hurley in Central Islip to pay $179 million in restitution to his known victims. But Hurley noted that because Cosmo has almost no resources, it is unlikely that the victims will get back much.
Cosmo's fraud was dwarfed by Bernard Madoff's billion-dollar Ponzi scheme in both the amount and the more affluent background of many victims.
Before he was sentenced, Cosmo said of his victims, "I hurt these people, good, blue-collar people. I feel very bad. I know in my heart, I never intended to hurt anyone."
In imposing sentence, Hurley scoffed at Cosmo's claim that he did not start out as a swindler, noting the operation of his five-year-long Ponzi scheme began several months after Cosmo ended a 21-month federal prison term for fraud.
Cosmo's attorney Richard Levitt had argued that his client should get a lenient sentence because his crime was compelled by the need for the money to feed a lifelong gambling addiction -- "an addiction just as powerful and debilitating as a heroin addiction." He also said that Cosmo had a modest personal lifestyle, taking in only $500,000 as the scheme ran between October of 2003 and January of 2009.
Federal sentencing guidelines, which judges do not have to follow, had recommended a sentence of between 27 and 33 3/4 years in prison.
Hurley did not explain why he imposed the 25-year sentence. But at one point in his remarks, the judge noted a recent sentencing ruling by another judge who said that the guidelines unfairly inflated suggested sentences by basing them disproportionately on financial loss.
Cosmo operated his scheme out of two Hauppauge-based companies, Agape World and Agape Merchant Advance, promising victims high-rates of interest by investing in bridge loans to commercial borrowers, according to federal prosecutors Demetri Jones and Grace Cucchissi.
Several of his victims had asked Hurley to give Cosmo the maximum 40-year sentence permissible under law, which went beyond the suggested guideline sentence. But afterward some victims did not object to Hurley's sentencing decision.
Kevin Milano, 55, of Wantagh, a school administrator, who said he lost $210,000, said, "As a victim, I felt one way. But a judge is supposed to take emotion out of things."
Ellen Gabriel, 63, a hairdresser from East Yaphank, said she had lost her $130,000 life savings to Cosmo, "and now I won't be able to retire."
But of the sentence, she said, "I can live with that. I just hope he is so different in 25 years when he gets out of prison that he doesn't commit any crimes."