Two key associates of convicted Long Island swindler Nicholas Cosmo were arrested by the FBI Tuesday morning on charges related to his $400 million Ponzi scheme, according to officials.
Bryan Arias, 40, of Maspeth, a sub broker for Cosmo, and Shamika Luciano, 31, of Coram, Cosmo's former executive assistant, were each charged with conspiracy and mail, wire and securities fraud related to the scheme that operated from Hauppauge-based companies, Agape World and Agape Merchant Advance. Luciano was also identified in a bail letter filed by prosecutors as Cosmo's girlfriend at the time of the scheme.
Arias illegally made $1.7 million and Luciano $275,000, according to Eastern District federal prosecutors Grace Cucchissi and Christopher Caffarone.
The two Cosmo associates pleaded not guilty at their arraignment in federal District Court in Central Islip. U.S. Magistrate A. Kathleen Tomlinson ordered them held without bail pending hearings this week. If convicted, they face up to 20 years in prison.
Loretta E. Lynch, U.S. attorney for the Eastern District, said in a statement that Arias and Luciano were "an integral part of Cosmo's Ponzi scheme."
"Even when the business ventures began to fail, the defendants continued to peddle lies and deceit to the investors in order to keep money flowing," Lynch said.
Arias and Luciano were added to a superseding indictment against three of Cosmo's associates previously charged -- Jason Keryc, 34, of Wantagh; Anthony Ciccone, 39, of Locust Valley; and Diane Kaylor, 36, of Bethpage.
Cosmo, who is serving a 25-year sentence for wire and mail fraud, took in more than $400 million from 5,000 investors between 2003 and 2009 by promising returns of up to 80 percent, officials have said. Many of the investors were blue-collar workers hoping to get rich from Cosmo.
About 4,100 of the investors lost a total of $179 million, officials said.
Kenneth Silverman, a Jericho bankruptcy expert named by the courts to recover money for the victims, said Tuesday he has located about 5 percent of the losses. In addition, the federal government has forfeited another 5 percent from monies it has seized, making victims eligible for, at most, 10 cents on the dollar they invested.
Silverman and federal officials have said that most of the money clients invested went into payments to early investors in the Ponzi scheme, commissions to Cosmo's brokers and the sub-brokers who worked for them, and losses Cosmo made investing in commodities futures.
One victim, Ellen Gabriel, of East Yaphank, a hairdresser in her sixties, said Tuesday she had lost her entire life savings of $130,000 investing with Cosmo. She said she has received $5,000 back, which she used to buy a car to replace one wrecked in an accident.
Gabriel said she has always lived frugally but she now worries, having lost her nest egg: "What happens when I can't work anymore?"
With Gary Dymski