A federal judge said Friday that a Queens man was one of the least culpable participants in a Ponzi scheme that defrauded thousands of working people of $179 million, but decided that the defendant must serve time in prison as a message to others.
U.S. District Judge Denis Hurley in Central Islip sentenced Bryan Arias to 2 1⁄2 years in prison and ordered him to pay back his share of the fraud — $1.9 million. Arias will report to prison on Dec. 1.
Arias, 43, of Maspeth, was part of the massive Agape World fraud scheme, conceived and run by Nicholas Cosmo from 2003 to 2009 in Hauppauge.
Cosmo is serving 25 years in prison. Arias pleaded guilty two years ago to conspiracy to commit mail and wire fraud.
“My client was essentially duped into getting employment at this firm,” said his attorney, Richard Librett of Manhattan. “His [older] brother and a close friend recruited him.”
Arias thought Agape World was legitimate at first, Librett said. But once he found out it was a Ponzi scheme, he continued working there “and that’s why we stand here today,” Librett said.
Assistant U.S. Attorney Chris Caffarone agreed, and acknowledged that once he was arrested, Arias was eager to help hold his co-conspirators accountable.
“The person who made these unconscionable choices, I would submit, judge, is not the person who’s here today,” Librett said.
Cosmo promised investors returns of up to 80 percent, claiming he was investing their money in short-term bridge loans to businesses. But most of the money actually covered losses in high-risk commodities trading or merely paid off earlier investors.
“I’d like to say I’m sorry to all my victims,” Arias said, choking up at times. “I know it’s not enough, but I’m sorry. I can’t believe I’m here. I wasn’t raised this way.”
Hurley told Arias that except for this episode, he seemed like an admirable man. But the judge told him he left his victims with “nothing but false promises” and the inability to retire as they had hoped, or pay for their children’s college education.
“The nature of the offense is horrendous,” Hurley said.
Although it seems unlikely that Arias will commit another crime, Hurley said it’s important to deter future schemes. “Other individuals should understand this is not a good business model to follow,” the judge said.
Concluding the sentencing, Hurley told the defendant: “Mr. Arias, I know this is difficult for you, but I wish you well.”