For Release: January 27, 2009
CFTC Charges Nicholas Cosmo and Agape Companies with Defrauding Customers of Tens of Millions of Dollars in Commodity Futures Trading Scheme
Washington, DC – The U.S. Commodity Futures Trading Commission (CFTC) today filed a federal law suit against Nicholas Cosmo of Lake Grove, New York, Agape World, Inc., (Agape World), and Agape Merchant Advance LLC (Agape Advance), both of Hauppauge, New York (collectively, defendants), charging them with defrauding customers of tens of millions of dollars.
In conjunction with the filing of the complaint today in the United States District Court for the Eastern District of New York, the CFTC is seeking a statutory restraining order freezing assets and preserving records.
In its enforcement action, the CFTC alleges that defendants solicited tens of millions of dollars from customers for the stated purpose of investing in bridge loans and merchant advances. Defendants then misappropriated a significant portion of those funds to engage in unauthorized commodity futures trading. Defendants’ unauthorized commodity futures trading resulted in tens of millions of dollars in losses, none of which were ever disclosed to investors.
Stephen J. Obie, Acting Director of the Division of Enforcement commented: “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. These schemes are so insidious because they undermine investors’ confidence to invest in legitimate enterprises. Investors must exercise caution with investments that sound too good to be true; by the time enforcement authorities get involved, swindled funds may be gone.”
Cosmo’s Criminal History Includes a Federal Conviction for Mail Fraud
In 1999, Cosmo, then a licensed stock broker and account executive, pleaded guilty to mail fraud after admitting to commingling funds, purposely misleading investors, and forging documents. Cosmo was sentenced to a 21-month prison term followed by three years of supervised release and payment of restitution.
The CFTC’s complaint seeks civil monetary penalties, disgorgement of ill-gotten gains, restitution to defrauded customers, and injunctive relief, among other sanctions.
The CFTC appreciates the assistance of the United States Attorney’s Office for the Eastern District of New York (EDNY), the United States Postal Inspection Service, the Federal Bureau of Investigation, and the Securities and Exchange Commission.
The following CFTC Division of Enforcement staff members are responsible for this case: Philip Rix, Elizabeth Brennan, Linda Peng, Steven Ringer, David Acevedo, Lenel Hickson, Jr., and Vincent McGonagle.
R. David Gary
Last Updated: January 27, 2009