Agape World president Nicholas Cosmo and several employees used investor money to fund a lavish lifestyle with fancy houses, expensive cars, jewelry, vacations and home improvements, a new federal lawsuit says.
The complaint filed Tuesday in U.S. District Court in Central Islip - the first lawsuit to emerge from what federal prosecutors say was a $380 million con - also suggests a broader scam than previously reported.
In addition to fooling investors into believing they were investing in bridge loans, the suit says Cosmo and employees of his Hauppauge-based company persuaded some to move retirement funds into Agape IRA accounts and also set up a bogus investment insurance program to make investors feel more secure.
"This was a criminal enterprise set up solely for the purposes of stealing money," said Bohemia attorney Joseph Campolo.
Prosecutors say Cosmo of Lake Grove, who is being held on a mail fraud charge as his lawyer negotiates bail, lost most of the investors' funds in commodities trading or funneling them to other investors. A spokesman for the U.S. attorney's office in the Eastern District of New York declined to comment on the IRAs and insurance program.
Campolo's clients - mother and son Janet and Scott Heaney of Garden City, husband and wife Jean and Curt Matzinger of North Babylon, mother and daughter Janis and Farrah Silverstein of Melville and Darlene A. Wilson of Columbus, N.C. - invested between $12,000 and $95,000 each. They are seeking more than $1 million in damages under the Racketeer Influenced and Corrupt Organizations Act.
Legal experts said it's unlikely the plaintiffs will collect on a judgment. They will be competing to seize Agape-related funds with prosecutors and a bankruptcy trustee overseeing the liquidation of the company.
The suit doesn't list the luxurious items allegedly purchased with Agape money by Cosmo and other defendants, including brokers Jason Keryc, Sebastian Tauz, Hugo Arias, David Petry, Martin Hartmann and Anthony Massaro.
But Department of Motor Vehicle and land records show Keryc, 31, of Long Beach, purchased a $2.7-million Montauk house in 2008 and owns a 2008 Bentley Continental and a 2008 Cadillac Escalade; Tauz, 31, of Huntington, has a 2006 Lamborghini and started hip-hop label Cet-It-Off Records; and Arias, 39, of Maspeth, owns a 2008 Bentley Continental and several New York City properties.
The suit says Cosmo spent money on jewelry, hotel rooms and limousine fares as well as a youth sports league in Seaford.
An attorney for Cosmo declined to comment. Massaro's attorney did not return a phone call. Keryc and Hartmann did not respond to phone messages. Attempts to reach Tauz, Petry and Arias were unsuccessful.