Bryan Arias, associate of Ponzi scammer Nicholas Cosmo, pleads guilty
A key associate of the Ponzi scammer Nicholas Cosmo pleaded guilty Friday to taking part in the scheme, officials said.
Bryan Arias, 41, of Maspeth, pleaded to conspiracy to commit mail and wire fraud in federal District Court in Central Islip.
In a prepared statement, Arias acknowledged that he worked for Cosmos' Agape companies based in Hauppauge and, from January 2006 to January 2009, that he knew he was lying to investors about the way their money was being invested and the chances that they would get high returns.
Arias admitted that he cheated one unidentified Hartford, Connecticut, woman out of $125,000 and one unidentified, Orlando, Florida, man out of $10,000.
As part of a plea agreement, Arias faces up to 5 years in prison when he is sentenced and 3 years of supervised release. He also agreed to forfeit $1.9 million.
Afterward, Arias' attorney, Richard Librett, of Manhattan and East Hampton, said his client "has accepted responsibility for his actions and is trying his best to make amends."
Eastern District federal prosecutor Christopher Caffarone declined to comment.
Cosmo, who is serving a 25-year prison sentence, ran his scheme from 2003 to 2009, promising investors up to 80 percent returns in investing in short-term bridge loans to businesses.
In fact, most of the money went to losses in high-risk commodities trading or to pay back earlier investors, as is typical in a Ponzi scheme, officials said.
In all, the scheme took in $400 million from 5,000 investors, most of them blue-collar workers of modest backgrounds, according to a federal judge.
Some 4,100 investors lost a total of $179 million, officials said.
At his sentencing in October 2011, Cosmo said: "I hurt these people, good, blue-collar people . . . I know in my heart, I never intended to hurt anyone."
But U.S. District Judge Denis Hurley said he doubted Cosmo's claim that he did not intend to engage in a Ponzi scheme. Hurley noted that Cosmo began his operation several months after he had ended a 21-month federal prison sentence for another fraud.
Kenneth Silverman, a bankruptcy expert and Jericho attorney hired by the courts, and federal officials have been able to locate only $10 million in Cosmo's assets, meaning that victims will get back at most 10 cents on the dollar of their investment.