Four associates of convicted Ponzi swindler Nicholas Cosmo were arrested Wednesday and charged with participating in the scheme that bilked more than $400 million from 5,000 investors, many of them blue-collar workers from Long Island lured by promises of investments with high returns and low risk, federal officials said.
The four -- Jason Keryc, 34, of Wantagh; Anthony Ciccone, 39, of Locust Valley; Anthony Massaro, 40, of Boynton Beach, Fla.; and Diane Kaylor, 36, of Bethpage -- worked as account representatives or brokers at Cosmo's Agape World and Agape Merchant Advance companies in Hauppauge between August 2000 and January 2009, authorities said.
The four were paid lucrative commissions for their part in the fraud that enticed investors with returns of up to 122 percent: Keryc received $16 million; Ciccone, $10.7 million; Massaro, $6.5 million, and Kaylor, $4.7 million, the federal complaint says.
Cosmo was sentenced in October to 25 years in prison in U.S. District Court in Central Islip by a judge who castigated him for swindling people of "modest backgrounds" out of money that was "the product of years of hard work."
Although 5,000 individuals invested with Cosmo's companies, about 4,100 investors suffered actual losses of $179 million because some investors received returns before the scam collapsed, which is typical of a Ponzi scheme, according to Loretta Lynch, U.S. attorney for the Eastern District of New York.
Keryc, Ciccone and Kaylor, arrested Wednesday on Long Island, were arraigned in federal court in Central Islip before U.S. Magistrate E. Thomas Boyle, who ordered them held until they could prove that they had assets to back up a $1 million bail package.
The three, who were not required to enter a plea Wednesday to the mail fraud complaint, face up to 20 years in prison if convicted.
Massaro was brought before a federal magistrate in Florida and held for a hearing Monday, Long Island federal prosecutors Christopher Caffarone and Grace Cucchissi said in court. They declined to comment afterward.
Kaylor's attorney, Michael Schwed, said: "She's 100 percent not guilty. . . . She cooperated and they had all her records three years ago, and now they decide they have a case [against her]?"
Massaro's attorney, Joseph Tacopina, said his client "will plead not guilty because he is not guilty. He was fully cooperative with the government in its case [against] Nicholas Cosmo years ago. So suffice it to say that these charges come as quite a shock."
Randi Chavis, Keryc's attorney, and Stuart Meissner, Ciccone's attorney, declined to comment.
Dennis Hand, of Islandia, said he lost several hundred thousand dollars in the fraud.
"I think it's fabulous and they should continue to investigate all the people who worked for Cosmo," Hand said about the arrests of Cosmo's four associates.
Although federal officials and a court-appointed trustee are attempting to recover money, it is unlikely that victims will get back more than a fraction of their losses, according to sources familiar with the investigation.
While many of the defendants lived "the high life," with fancy cars, vacations and expensive homes until Cosmo was arrested in 2009, federal prosecutors have been able to find only $5.3 million to seize from Keryc and Ciccone. Kaylor did not have any seizable assets and Massaro is contesting the seizure of $500,000, court papers stated.
Much of the investors' money was lost in unsuccessful bets in commodities and future trades, instead of going to promised safe investments, and the four had numerous sub-brokers working for them who shared in their earnings, according to the complaint. The investigation into the sub-brokers is continuing, the sources said.
The federal court-appointed trustee, Jericho attorney Kenneth Silverman, declined to comment Wednesday.
Joseph Campolo, a Bohemia attorney who represents several victims who are suing separately to recover money, also declined to comment.