LI's 'Mini-Madoff' Cosmo to be sentenced
Nicholas Cosmo -- the man who, prosecutors say, bilked thousands of Long Islanders and other clients out of more than $195 million -- is scheduled to be sentenced today in the U.S. District Court in Central Islip.
Cosmo, 39, of Lake Grove, pleaded guilty last October to mail and wire fraud, in operating a Ponzi scheme out of his then Hauppauge-based companies, Agape World and Agape Merchants Advance. He had come to be known as a "mini-Madoff," although almost all his victims were middle-class, while Bernard Madoff swindled many more wealthy people.
Between October 2003 and January 2009, Cosmo defrauded 3,000 investors by promising them high rates of returns in several schemes, according to federal prosecutors Grace Cucchissi and Demetri Jones.
Overall, Cosmo paid off initial investors with money from newer investors. In one scheme, Cosmo ostensibly claimed that investors would get the returns by funding short-term bridge loans to businesses that accepted credit cards and needed temporary financing. Cosmo also lost more than $100 million of his investors' money in unsuccessful futures and commodities trading, officials said.
Cosmo could face up to 40 years in prison when he is sentenced by U.S. District Judge Denis Hurley. As part of a plea bargain, Cosmo agreed to accept a restitution order of at least $195 million, but the judge noted it is unlikely that he has the resources to repay a fraction of that amount.
After Cosmo pleaded guilty, Hurley told a courtroom filled with victims who had spoken about how Cosmo had ruined their lives: "It's unlikely the people in this room will be made whole . . . Is 40 years adequate? I'll have to reflect on that . . . I wish I could say something to all of you that would be of some comfort."