Feds: Jericho man scammed school out of millions

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A Jericho man who federal authorities said stole more than $2 million from a South Korean school to pay for a lavish lifestyle that included fancy cars and gambling trips to Las Vegas has been arrested and charged with fraud.

Federal prosecutors Thursday said William R. Cosme, 46, also known as William R. Cosmo, conned the head of the school into giving him $5.5 million. In exchange, Cosme promised to invest the money, then use the earnings to lend the school $55 million so it could expand and build a new school.

"Under the guise of investing their money, he 'invested' in fast cars and Vegas vacations for himself, playing fast and loose with the school's money," said George Venizelos, assistant director in charge of the FBI's New York field office.

Cosme was arrested Wednesday at his home and charged with one count of wire fraud before U.S. Magistrate Judge Sarah Netburn in federal court in Manhattan. At the court appearance, Cosme was not required to, and did not, enter a plea.

As of late Thursday, Cosme remained in jail on $1 million bond. His attorney, Larry Ruggiero, of Manhattan, declined to comment, saying he has not had a chance to speak with his client.

Prosecutors said Cosme met the head of the school through an intermediary. At a meeting at Kennedy Airport with the school official on Dec. 11, 2010, Cosme proposed that the school wire $5.5 million to Cosme Dabi International Trading Group Inc., which Cosme falsely claimed was a private equity firm managing over $11 billion in assets, prosecutors said.

Prosecutors wouldn't identify the intermediary or say whether the intermediary was part of the scam.

The school, which serves about 450 students from prekindergarten to 12th grade, wired the $5.5 million to Cosme around Jan. 21, 2011, prosecutors said. Two months later, when school officials tried to get the first loan installment, $15 million, Cosme came up with numerous excuses for the delay, prosecutors said.

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After several months, the school demanded its money back, prosecutors said, and Cosme made up more excuses as to why he could not return the money to the school.

Meanwhile, prosecutors said, Cosme spent the school's money on three cars, including a 2012 Lamborghini Gallardo, rent on a luxury Manhattan apartment and several trips to Las Vegas, where he had an account at The Venetian Resort Hotel Casino.

Authorities seized the Lamborghini and two other cars, a Cadillac and a Nissan, and $629,000 in cash.

Prosecutors would not say what happened to the remaining $3.5 million.

They did, however, say that at some point, Cosme bought stocks, including in Apple, Google and Johnson & Johnson.

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