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SEC Charges Agape Agents in Long Island Ponzi Scheme

Matthew R. Wilson, Esq.

SEC Charges 14 Sales Agents in $415M Long Island, New York Ponzi Scheme

Earlier this week, the SEC charged 14 sales agents with facilitating a four-year, $415 million investment scheme allegedly orchestrated by Nicholas J. Cosmo, President of Agape World, Inc. According to the SEC, the sales agents, who all sold securities for Agape, made various misrepresentations to investors and illegally sold securities. According to the SEC, more than 5,000 investors from across the nation were defrauded in the scheme.

The SEC’s Complaint alleges that from 2005 through January 2009 the 14 defendants “repeatedly sold investments offered by Agape that promised investors outsize returns, typically 12-14% in as little as eight to ten weeks (or approximately 6291% annually), from their participation in high interest bridge loans purportedly made by Agape to commercial borrowers.”

The defendants also allegedly sold investments in Agape Merchant Advance LLC ("AMA") that supposedly promised returns of up to 4% per month. This occurred despite the fact that neither Agape nor any of the defendants was registered with the SEC. Additionally, all of the investors were falsely told that only 1% of their principal was at risk in the investment.

“The Agape securities they [the defendants] peddled were actually non-existent, and investors were merely lured into a Ponzi scheme where earlier investors were paid with new investor funds,” wrote the SEC. “The sales agents turned a blind eye to red flags of fraud and sold the investments without hesitation, receiving more than $52 million in commissions and payments out of investor funds.”