February 28, 2013
Federal District Court in New York Enters Order of Permanent Injunction against Defendants Agape World, Inc. and Agape Merchant Advance LLC, Charged with Defrauding Customers in Commodity Futures Trading Scheme
Defendants are permanently banned from the futures industry
Washington, DC - The U.S. Commodity Futures Trading Commission announced today that it obtained a federal court Order against Defendants Agape World, Inc. and Agape Merchant Advance LLC (the Agape Entities), charged by the CFTC with defrauding customers of tens of millions of dollars in a commodity futures trading scheme (see CFTC Press Release 5606-09, January 27, 2009). The Consent Order of Permanent Injunction, entered by Judge Leonard D. Wexler of the U.S. District Court for the Eastern District of New York, imposes permanent trading and registration bans against the Agape Entities and permanently bars them from engaging in any commodity-related activity.
In 2009, the CFTC charged the Agape Entities and Defendant Nicholas Cosmo, formerly of Lake Grove, N.Y., and the Agape Entities’ owner, with engaging in a fraudulent scheme in which tens of millions of dollars were solicited from investors to invest in bridge loans and merchant advances. Instead, according to the Complaint, the defendants used a significant portion of those funds to engage in unauthorized commodity trading, which resulted in tens of millions of dollars in losses that were never disclosed to investors.
In a related criminal case, Cosmo sentenced to 300 months in prison and ordered to pay over $179 million of restitution to defrauded investors
Previously on October 1, 2012, Judge Wexler entered a Default Judgment and Permanent Injunction Order against Cosmo, which imposed a $240 million civil monetary penalty, permanent trading and registration bans, and other equitable relief against him (see CFTC Press Release 6402-12, October 25, 2012). In a related criminal case, United States of America v. Nicholas Cosmo, Docket No. CR-09-255 (DRH), Judge Denis R. Hurley sentenced Cosmo to 300 months in prison and ordered him to pay over $179 million of restitution to investors. Pursuant to a December 11, 2010, Preliminary Order of Forfeiture, Cosmo agreed to forfeit approximately $409.3 million. Cosmo is currently incarcerated.
The Agape Entities are debtors in a Chapter 7 Bankruptcy proceeding pending before Judge Dorothy T. Eisenberg in the U.S. Bankruptcy Court for the Eastern District of New York (see In re Agape World, Inc. et al., Case No. 09-70660 (DTE). Notice of the proposed Consent Order was provided to all interested parties to the bankruptcy proceeding and no objections were filed.
The CFTC appreciates the assistance of the U.S. Attorney’s Office for the Eastern District of New York, the Federal Bureau of Investigation, the U.S. Postal Inspection Office, and the U.S. Securities and Exchange Commission.
The CFTC Division of Enforcement staff members responsible for the action are Elizabeth C. Brennan, Philip Rix, Steven Ringer, Lenel Hickson, Stephen J. Obie, and Vincent McGonagle.
Last Updated: February 28, 2013