Nicholas Cosmo of Lake Grove, New York, is facing federal charges for defrauding customers of tens of millions of dollars, according to a complaint filed by the U.S. Commodity Futures Trading Commission (CFTC) on January 27, 2009. The CFTC alleges Cosmo, along with Agape World, Inc., and Agape Merchant Advance LLC, solicited funds from investors under the guise of bridge loans and merchant advances.
Instead of utilizing the funds as represented, the CFTC claims Cosmo misappropriated a significant portion to engage in unauthorized commodity futures trading. These trades resulted in substantial losses, which were never disclosed to investors. The CFTC is seeking a statutory restraining order to freeze assets and preserve records related to the alleged scheme.
“Defendants here swindled tens of millions of dollars from unsuspecting customers through phony profitability promises, while, in actuality, losing millions speculating in commodity futures trading,” stated Stephen J. Obie, Acting Director of the Division of Enforcement. “These schemes are so insidious because they undermine investors’ confidence to invest in legitimate enterprises.”
This is not Cosmo’s first encounter with the law. In 1999, he pleaded guilty to mail fraud while working as a licensed stockbroker and account executive. He admitted to commingling funds, misleading investors, and forging documents, resulting in a 21-month prison sentence, three years of supervised release, and a requirement for restitution.
The CFTC’s complaint, filed in the United States District Court for the Eastern District of New York, seeks civil monetary penalties, disgorgement of ill-gotten gains, restitution for defrauded customers, and injunctive relief. The investigation received assistance from the United States Attorney’s Office for the Eastern District of New York, the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Securities and Exchange Commission.
Source: CFTC.gov
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