Agape scam victims told they owe money

Hundreds of Nicholas Cosmo's Ponzi scheme victims -- mostly middle-class people who lost their life's savings in his Agape World investment scam -- have received notices in recent weeks from the Agape bankruptcy trustee informing them that they're now also defendants and owe money.

"I'm not going to give them money," said Kevin Milano, 54, of Wantagh. "If they're going to take money from victims like this, it's despicable. It's despicable."

Milano said he lost more than $210,000 in the scam. The bankruptcy trustee wants $24,217 from him, saying it represents money Milano withdrew from his Agape account.

Cosmo, 39, of Lake Grove, pleaded guilty last month in U.S. District Court to wire fraud and mail fraud, and he faces up to 40 years in prison when he is sentenced in February.

Prosecutors said he stole as much as $200 million from more than 3,000 victims. His firms told investors they'd be financing safe, short-term loans to businesses, but instead Cosmo lost it investing in high-risk commodities and kept some himself.

Since late August, bankruptcy trustee Kenneth Silverman of Jericho has filed about 350 suits against Agape victims. Except for names and numbers, they're all substantially the same -- they say that in the 90 days before Agape went belly up in February 2009, these investors got some portion of their investment back.

The suits say that until the victims pay that money back, they shouldn't get a cent from any Agape money that remains. So-called "claw back" efforts are common in the aftermath of Ponzi schemes, as authorities try to recover money from those who have benefitted. Usually, however -- as in the Bernard Madoff case -- the targets are people who have made money.

Estimates are that not much remains. Several victims say they've been told they'll get about 6 cents on the dollar. For many of the victim defendants, that means that if they manage to pay what Silverman is demanding, they'll still get nothing.

Silverman did not respond to several requests for comment.

"He's going to force me to file bankruptcy," said Dennis Hand, 59, of Islandia. "The guy who's supposed to throw you a lifeline is hitting you on the head with the . . . paddle."

Hand said he lost $373,000 in the scam. Silverman wants $18,175 from him. If he can't pay it, and the Bankruptcy Court enters a judgment against him, the judgment will hang over him and his credit until it's paid off.

"We're the victims," said Dominick DiColandrea of West Babylon, but they're being forced to pay again. He said he lost $230,000 in the scam. Silverman wants $10,865 from him.

Milano said Silverman's efforts make no sense. Most of the people he's suing have been wiped out and can't pay anything, so no victims will benefit, he said. It does, however, create work for which lawyers can bill, he said.

In Silverman's most recent bill to the Bankruptcy Court, he seeks fees of $873,768.95, plus expenses of $79,577.43. The fees are paid from whatever remains of Agape and any money Silverman can recover.

"Nick Cosmo should have been an attorney," Milano said. "He could have done it all legally."