He started Agape, an investment company.
Nicholas Cosmo worked at a stock brokerage firm, but he was a naughty boy. He was arrested for a series of improper and illegal actions, such as forging documents. He lost his broker's license, was told he could not associate with securities dealers, and was convicted of felony fraud.
He served 21 months in prison. When he got out of prison, he learned his lesson.
He started some investment companies of his own.
Over 4,000 investors trusted his companies with over $400 million, which he used to make short-term loans to businesses.
He hired ex-convicts as brokers and paid them very well.
His companies were called Agape World Inc. and Agape Merchant Advance LLC. "Agape" means an unselfish brotherly love.
It also means a mouth wide open in surprise.
After five years, Mr. Cosmo was arrested.
He had orchestrated a scheme that stole over $195 million from his clients in a classic Ponzi scheme. The company paid clients who wanted cash with money they collected from other clients, but most clients were content with what looked like great returns on their statements.
Mr. Cosmo was sent back to prison, this time for 25 years.
- "Mini-Madoff" gets 25 years for $400 million Ponzi fraud, Reuters>>
- Nicholas Cosmo, Wikipedia>>