A former broker and bookkeeper was sentenced to 6 1⁄2 years in prison for her role in a Ponzi scheme that led to 3,800 investors losing $150 million, prosecutors said.
Diane Kaylor, 40, of Bethpage worked for Agape World and “played a critical role” in the scheme at the Hauppauge-based company that operated from October 2005 to January 2009, federal prosecutors said in a news release Friday.
Kaylor was convicted of securities fraud, conspiracy, mail fraud and wire fraud after a four-week jury trial in April 2015. She solicited tens of millions of dollars from investors, prosecutors said, then took $3.6 million in “commission” payouts for herself to buy luxury cars and pay for exotic vacations and home improvements, among other things.
U.S. District Court Judge Denis R. Hurley imposed Kaylor’s sentence Friday in Central Islip. It also included an order for her to pay nearly $179 million in restitution after her prison sentence.
“For more than three years, Diane Kaylor and her co-defendants sold lies to thousands of unsuspecting investors,” Robert L. Capers, the U.S. attorney for the Eastern District of New York, said in the release. “Victim investors have been saddled with huge debts, some lost their life’s savings, their retirements have been delayed, and their children have been saddled with unforeseen student loan payments. Kaylor has now been held to account for her role in these crimes.”
The FBI and U.S. Postal Service led the investigation and were helped by the U.S. Securities and Exchange Commission.
Agape was founded in August 2000 by Nicholas Cosmo, who had just served 21 months in a federal prison for defrauding investors. Cosmo pleaded guilty to his crimes for this Ponzi scheme in October 2011 and was sentenced to 25 years in prison for his role as the mastermind. Jason Keryc of Wantagh, an Agape broker, was sentenced to 9 years in prison; on April 22, Anthony Ciccone, another Agape broker, was sentenced to 7 years in prison. Five others have also been convicted and are awaiting sentencing by Hurley.
“Between October 2005 and January 2009, Kaylor played a critical role in the scheme, soliciting and obtaining tens of millions of dollars from investors. To induce investments and discourage withdrawals, she misled investors by assuring them that their money would only be used to fund specific, short-term secured bridge loans to commercial borrowers, or to make short-term loans to small businesses, promising to pay investors unusually high rates of returns and representing that investing in Agape carried little or no risk of loss,” prosecutors said in the release.
Instead, about $113 million of investors’ money was used to trade high-risk futures and commodities, more than $80 million of which was lost in these markets, the release said.
But Kaylor deceived investors about the company’s financial health, prosecutors said, including by continuing to solicit money from them while failing to disclose that the 2007 bridge loans were in default or on extension.
Kaylor’s attorney did not respond to a request for comment Saturday.