Reuters: Regulatory News: SEC charges 14 linked to Cosmo $415 mln Ponzi scam

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SEC charges 14 linked to Cosmo $415 mln Ponzi scam Jun 12th 2012, 19:31 Tue Jun 12, 2012 3:31pm EDT * Nicholas Cosmo sentenced to 25 years prison * Middle-class targeted, more than 5,000 bilked - SEC * Criminal charges filed in April against four agents By Jonathan Stempel June 12 (Reuters) - Fourteen sales agents associated with convicted swindler Nicholas Cosmo were charged by the U.S. Securities and Exchange Commission with misleading thousands of middle-class investors into buying securities to fuel his $415 million Ponzi scheme. The SEC said more than 5,000 investors in Long Island, New York and elsewhere were falsely promised outsized returns through non-existent investments from Cosmo's Agape World Inc and Agape Merchant Advance LLC. Dubbed in some media accounts as a "mini-Madoff" after the swindler Bernard Madoff, Cosmo was sentenced in October to 25 years in prison and ordered to repay $179 million to victims. Cosmo, 41, had pleaded guilty to fraud in 2010. In a civil complaint filed Tuesday with the federal court in Central Islip, New York, the SEC said the agents often promised double-digit returns within three months, or as much as 91 percent annualized, but that new money was actually used to repay earlier investors. The SEC also said the agents ignored "red flags" of fraud as they collected $52 million of commissions and payments. It said most of this sum went to three sets of brothers: Anthony and Salvatore Ciccone, Jason and Michael Keryc, and Bryan and Hugo Arias. Anthony Ciccone lives in Locust Valley, New York; Salvatore Ciccone, Bryan Arias and Hugo Arias in Maspeth, New York; Jason Keryc in Wantagh, New York; and Michael Keryc in Baldwin, New York, the SEC said. Sales agents "raked in commissions without regard for investors or any apparent concern for Agape's financial distress and inability to meet investor redemptions," Andrew Calamari, acting director in the SEC regional office in New York, said in a statement. Lawyers for Anthony Ciccone and Jason Keryc did not immediately respond to requests for comment. It is unclear whether their brothers or the Ariases have hired lawyers for the SEC case, and those defendants could not immediately be reached. Anthony Ciccone and Jason Keryc were among four people who were criminally charged in April with involvement in the fraud. They both pleaded not guilty and were freed on $1 million bond, court records show. The case is SEC v. Arias et al, U.S. District Court, Eastern District of New York, No. 12-02937. Link this Share this Digg this Email Reprints

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