Saturday, March 28, 2009
To those of you who couldn’t make it. I hope we’ll see you at the next one. Keep in mind that we need your support to continue with the progress and momentum we have sustained thus far.
We heard from:
1. Tom Valery or “Resolutions, Investigations and Risk Management” regarding the Trustees role in the bankruptcy process, the “341” meeting that we all should attend upon notification from the trustee’s office and the options that might be available to us going forward.
2. Robert Wilson, the business consultant to the “northway development group (bridge loan)” regarding his proposal to reimburse the agape victims 100% plus equity interest in the development.
3. Paul Rachmuth, Robert Wilson’s attorney was very helpful in understand the legal options of the proposal.
4. Art House, developer of the “carriage house (bridge loan)” project regarding his proposal to reimburse the agape victims 100% plus interest.
We had a short Q&A on related matters and broke by 11AM.
The meeting was covered by “DATELINE MSNBC” and “LONG ISLAND BUSINESS NEWS –LIBN”.
For updates or exchange of information on upcoming events on "agape world inc" status go to:
Friday, March 27, 2009
Thursday, March 26, 2009
Wednesday, March 25, 2009
Tuesday, March 24, 2009
BY ROBERT E. KESSLER email@example.com
9:01 PM EDT, March 24, 2009
A federal judge in Central Islip Tuesday granted a preliminary injunction against Nicholas Cosmo, the Hauppauge businessman accused of operating a $380- million Ponzi scheme, barring him from engaging in commodities trading and freezing his assets.U.S. District Court Judge Leonard Wexler granted the injunction against Cosmo, 37, on the basis of a request by the U.S. Commodity Futures Trading Commission.The injunction was agreed to by Cosmo, who was taken to court by federal marshals. He has been in jail since his arrest in January because he has been unable to come up with a bail package acceptable to the court.
Ronald Friedman, the attorney for a federal bankruptcy trustee in the Cosmo case, also was in court and said the injunction does not bar the trustee's attempts to locate money Cosmo potentially owes. The bankruptcy trustee was appointed by the federal court to recover assets to pay people to whom Cosmo owes money, potentially including investors.
Cosmo, a Lake Grove resident who headed Agape World Inc. in Hauppauge, was not represented in court by a civil attorney.But Stacey Richman, the attorney representing Cosmo in his criminal case, said the judge's actions were in the interest of everyone because it allowed for assets to be located.Cosmo has not been required to plead to a criminal charge of fraud.
A grand jury indictment, to which he would have to plead, has been delayed several times at the request of both Richman and federal prosecutors.Cosmo's company was ostensibly set up to provide investors high-interest returns based on bridge loans to businesses needing short-term cash.
Friedman said that so far he has been able to locate about $26 million of Cosmo's assets - of the $380 million invested in the company.That includes $20 million in loans made to at least 15 businesses around the country; $750,000 in cash in a bank account; $5 million in a state-of-the-art sports complex in Hauppauge, and $1 million invested in a Jericho restaurant, Friedman said.
Friedman said the trustee has retained attorneys in all the states where the loans amounting to $20 million were made, in an attempt to recover that money.Friedman also said that U.S.
Bankruptcy Judge Dorothy Eisenberg has set June 18 as the last day for investors to file claims in the bankruptcy court in Central Islip.
Steven Ringer, an attorney for the trading commission, an independent federal agency, declined to comment, as did Robert Nardoza, a spokesman for the U.S. attorney for the Eastern District of New York, which is prosecuting Cosmo.
The trading commission is involved in the case because federal prosecutors have said that despite his claims to have made the bridge loans, Cosmo invested $100 million in the commodities futures market, losing at least $80 million.
801 Crooked Hill Rd
Brentwood NY 11717
(rsvp to the yahoo group poll)
trustee "341" process
Also please note, the Interim Trustee has suggested that we are welcome to call his office and ask to speak to him directly with any questions or suggestions that we might have on the "involuntary bankruptcy" proceeding.
His contact info is:
Please feel free to call.
If you care to share with the group your experiance - we welcome your input.
Monday, March 23, 2009
Sunday, March 22, 2009
Bank of America: “Bank of Opportunity” for Convicted Felons?by Jacob Zamansky on February 2nd, 2009 at 12:09 pm :
The New York Times last week published an investigative story questioning JPMorgan Chase’s connection to the Bernie Madoff scandal. Similarly, I’m looking for answers about Bank of America’s connection to two other Ponzi schemes that were concocted by known felons. While these schemes pale in comparison to Madoff’s $50 billion fraud, the possibility that America’s biggest banks were potentially involved in allowing sizeable Ponzi schemes is most disturbing.
My office, on behalf of clients, is still in the early stages of investigating Agape World, Inc., a $380 million Ponzi scheme allegedly carried out by Nicholas Cosmo. We have learned that Agape World on its contracts listed Bank of America as its “banking agent” and that all monies to the fund were wired to a BofA branch on Long Island.
We haven’t yet determined exactly what functions BofA provided Agape World. “Banking agent” functions often include performing back-office operations, which presumably would have given the branch a bird’s eye view of transfers to and from Agape World’s account. Agape World required a minimum investment of $20,000, and given the reported size of Cosmo’s Ponzi scheme, the account likely generated considerable activity (and, no doubt, lucrative fees).
Under the Patriot Act, banks are required to be on the outlook for suspicious or fraudulent activity and report wire transactions of $10,000 or more. Most banks typically are very diligent about complying with the law: The Fed’s uncovered Eliot Spitzer’s proclivity for prostitutes when the former New York governor’s bank reported the transfer of funds to the company that arranged his illicit liaisons.
Given that Cosmo had previously been convicted of securities fraud and ordered to undergo gambling therapy, BofA had plenty of reason to closely monitor his account.
Earlier this month, BoA was sued by a group of investors for being complicit in an Internet “ad package” Ponzi scheme. According to the lawsuit, a small Bank of America branch in Florida was the conduit for the scheme operated by Andy Bowdoin, who also was previously convicted for securities fraud. The lawsuit claims that at least one other financial institution closed accounts related to Bowdoin’s fraud, VISA would not process charges relating to his scheme and PayPal allegedly rejected efforts by Bowdoin and his perpetrators to use its popular payment system.As evidenced by its hasty and misguided acquisition of Merrill Lynch, it’s already known that due diligence isn’t one of BofA’s core competencies. And perhaps it’s merely a coincidence that two securities fraudsters chose to orchestrate their Ponzi schemes through BofA branches. But this matter is worthy of close and aggressive examination. Given that JP Morgan Chase and BofA are now wards of the government, Congress and regulators should be fast demanding some answers.
Clearly at the top of the Obama administration’s agenda is securities industry reform. Given the rash of Ponzi Schemes of late, they would be wise to consider the role of banks in monitoring such activity.Filed under Bernard Madoff, Peter Dawson, WexTrust Capital and Agape World, Nicholas Cosmo, Ponzi Schemes
*Special thanks to Diana for the posting
We can use the time to discuss a strategy going forward.
I don't have a place for us to meet. I need your help in finding one.
Please don't write or call me about where I should look. If you have a suggestion, follow it up make the arrangements and let me know where and when. I'll get the message out. The facility should house 100+.
I hope to see several hundred of you there. I will be inviting the friends we have in "media".
We also need to be prepared to attend the "bankruptcy court hearing the following week (date to be confirmed).
Friday, March 20, 2009
Regulator: It's 'Ponzimonium'
Commodity Futures Trading Commission commissioner says 19 Ponzi schemes uncovered so far this year.
March 20, 2009: 3:45 PM ET
BOSTON (Reuters) -- Hundreds of people in the United States are under investigation for financial scams, many involving Ponzi schemes, a U.S. regulator said, calling the phenomenon "rampant Ponzimonium."
While none are as mammoth as disgraced financier Bernard Madoff's $65 billion fraud, multimillion-dollar "mini Madoffs" are proliferating from New York to Hawaii, the head of the Commodity Futures Trading Commission said.
So far this year, the agency has uncovered 19 Ponzi schemes, which depend on an influx of new capital instead of investment profits to pay existing investors.
That compares with just 13 for all of 2008.
"Because of the economy, people are seeking redemptions more than they ever have and that's making a lot of these scams go belly up," Bart Chilton, commissioner of the Washington-based Commodity Futures Trading Commission, said in a telephone interview.
In the last month, his agency has pursued investment fraud in Pennsylvania, New York, North Carolina, Iowa, Idaho, Texas and Hawaii.
Chilton called the problem "rampant Ponzimonium" and "Ponzipalooza" - a play on the word "Lollapalooza," an American music festival featuring a long list of acts.
Many of the financial scams are small but grew fast to support lavish lifestyles, like the suspected $40 million, five-year Ponzi scheme that came to light last month when a North Carolina man, Bruce Kramer, committed suicide.
Claiming he was an expert mathematician, Kramer is accused of persuading 79 people to invest in what he said was a foreign currency trading operation, Barki LLC. He promised monthly returns of at least 3% to 4%, the CFTC said.
Instead, he funneled money into a Maserati sports car, a $1 million horse farm and artwork while holding "extravagant" parties, according to a CFTC complaint released on Wednesday.
As the economy soured, Kramer struggled to find new clients to keep the scheme going. In the days before his suicide, his investors demanded their money back and grew suspicious when they couldn't access their own funds, said Chilton.
The Commodity Futures Trading Commission shares oversight of financial markets with the Securities and Exchange Commission, which also faces a swelling casebook of Ponzi schemes, including charges against Texas billionaire Allen Stanford, who is accused of bilking investors of $8.8 billion.
Those accused of the scams used the money for cars, boats, clothing, jewelry, homes and ranches, said Chilton. One bought his own island in Belize in Central America, he added.
"Some are easier to catch now because people are more vigilant than they have been," he said.
Thursday, March 19, 2009
- With Michael A. Kessler private investigator, a former investigations chief for the state’s Department of Tax and Finance and former director of its Revenue Crimes Bureau.
Early last year while Kessler working for a client to determine the agape risk factor, he concluded mid 2008 that this was a ponzi and took the time to protect his client and notify several governmental agencies about his findings.
Surely he could have done more to alert the public.
With the media and internet available to us all surely something could have been done.
- With the government
At that time, Kessler notified the Suffolk County Police who referred him to the Suffolk County District Attorney, who told him they didn’t have jurisdiction over the matter and referred him to the New York State Attorney General’s office, which ignored it.
And how about :
Thomas J. SpotaSuffolk County District Attorneywho’s Executive Offices are in Hauppauge, NY (practically neighbors to the agape main office)
Quote from The District Attorney website :
My office is the public’s advocate in the criminal justice system and the first line of defense against those whose acts and conduct serve notice on society that they are not fit to live amongst us.
In addition to safeguarding the physical security of people, the District Attorney must also ensure that citizens are not the victims of economic injustice
I also promise the people of Suffolk County that my office will be proactive in investigating consumer frauds as well as prosecuting any business that engages in false advertising, bait and switch tactics or any other scams intent on defrauding the public.
This is the responsibility I now accept as your District Attorney. In every word and deed I’ll strive to prove worthy of the trust and confidence that you have reposed in me.
So according to this DA’s office …they didn’t have jurisdiction over the matter?
What happened to first line of defense, ensuring that citizens are not the victims of economic injustice and being proactive in investigating fraud as well as any business that engages in false advertising, bait and switch tactics or any other scams intent on defrauding the public.
Interesting that the DA’s office would “not want to get involved” but would be the first in line to push potential witnesses to a crime that didn’t directly affect them to “get involved”.
- Now lets talk about the attorney generals office.
How does the Attorney Generals office ignore the potential injury to so many victims?
Under thier umbrella operates:
- The Consumer Frauds Bureau"
This Bureau, prosecutes businesses and individuals engaged in fraudulent, misleading, deceptive or illegal practices. As part of its mission, the Bureau provides information to consumers and to ensure a fair market place.
- The Investor Protection Bureau
The Investor Protection Bureau is charged with enforcing the Martin Act. The Martin Act gives the Attorney General power to conduct public and private investigations of suspected fraud.
The New York State Office of the Attorney General is committed to protecting the rights of victims of crime and abuse.
Where were they when Kessler notified them in august?
Did you know that the trustees office noted in federal court last week that over the past 12 months approx 20 million dollars a month was invested, right up to January 2009?
- With the trustees office
Where are they in this investigation?
Why don’t they meet with a small group of us to work together on hidden assets? We have a group of over 300 victims writing or calling us every day with information. Isn’t there a small possibility that we might have some insight into the dealing of cosmo and his court jesters?
- With the victims:
Too many of them are waiting for someone to save them. A handful of them are actively attending meetings, interviews and researching possible avenues of recovery.
The rest should be writing letters, signing petitions, calling for state and local government to assist us.
You know what I think; President Obama should be getting 5000 letters a week from our group asking him to bail us out.
We will promise not to spend it on parties.
We aren’t the madoff victims. We don’t have the same access to the powers that protect.
We don’t make significant contributions to political campaigns.
We don’t rub elbows with the “upper class”. We aren’t celebrities, or warren buffets.
We are simple hardworking middle class America.
We are soldiers in, Iraq, police and firemen serving the public at risk to our very lives, Widows, single parents , mothers, fathers, sisters and brothers all working to support our families in the worst economic time in this generations history.
But, No one is listening, no one cares… Until it happens to them.
Wednesday, March 18, 2009
Published: March 17, 2009
The Internal Revenue Service said Tuesday that it would allow victims of Bernard L. Madoff’s huge investment fraud to claim a tax deduction related to the bulk of their losses.
Skip to next paragraph
Douglas Shulman, the I.R.S. chief, said the Madoff case “raises a staggering array of tax issues.”
The plan represents the first time the I.R.S. has come forward with a policy on the treatment of Mr. Madoff’s victims, who include Elie Wiesel, the Holocaust survivor and Nobel laureate; Steven Spielberg, the filmmaker; and John Malkovich, the actor, among scores of other individuals, charities and universities.
The matter has been a point of debate and anxiety for the victims and their accountants, given the lack of clarity in the tax code about how it should be handled.
The plan, which applies to victims of all Ponzi schemes, is likely to provide major relief to victims of Mr. Madoff, who pleaded guilty last week to orchestrating what prosecutors say is the largest Ponzi scheme — one that exceeded $50 billion and involved 13,000 investors. It is also likely to provide clarity for victims as they prepare to file federal income tax returns by the April 15 deadline, and help the I.R.S. avoid an unwanted avalanche of amended returns from victims.
The commissioner of internal revenue, Douglas Shulman, announced the plan in testimony before a Senate Finance Committee hearing on Ponzi schemes, tax evasion and offshore banking fraud. Later, in a briefing, Mr. Shulman said that “clearly the Madoff case is tragic as so many people were victims of this fraud, but the case also raises a staggering array of tax issues.”
An I.R.S. official, who declined to be quoted by name under the rules of the briefing, would not say whether the deduction would apply to investors in the Stanford Financial Group, the Texas company accused by the Securities and Exchange Commission last month of orchestrating an $8 billion fraud. “To have a theft loss, there needs to be some evidence of criminal theft,” the official said, declining to comment further.
The I.R.S. plan eases rules governing theft losses, which are deductions claimed by investors who are cheated by their advisers and others in Ponzi schemes and similar frauds.
Under the plan, the I.R.S. will allow investors, including those who are suing Mr. Madoff, to claim a theft loss equal to 95 percent of their investments, minus any withdrawals, reinvested gains and payouts from the Securities Investor Protection Corporation, the government-chartered fund formed to help protect investors in failed brokerage firms. Investors who are suing third-parties involved in such a scheme, and who, as a result, may have some prospect of recovery, are permitted to claim a deduction equal to 75 percent of their investments.
The plan appears generous in that it allows investors to take a deduction against their total ordinary income on investment gains they were told they had received from Mr. Madoff but that turned out to be fictitious.
Current theft loss rules typically allow losses to be carried back three years and forward 20 years, but the I.R.S plan will allow carrybacks of as many as five years, generally if the loss is for a small business with gross annual receipts of less than $15 million. Under the plan, investors must claim the loss as having happened in 2008.
For people who invested with Mr. Madoff through retirement plans, like 401(k)s and individual retirement plans, the picture is more complicated because such money was already invested on a tax-free basis. Mr. Shulman, the commissioner, said that generally, if the investment was deductible when it was made, such investors “can’t take a loss.”
When computing losses, investors are not permitted to include any taxes they paid on what turned out to be fictitious income.
But the plan affords relief to such investors by allowing them to include fictitious income in their loss computations — a measure that might allow them to recoup taxes paid. It also will keep scammed investors from “owing taxes on income that they never received,” said Senator Charles E. Schumer, Democrat of New York and a member of the Senate Finance Committee.
People who invested with Mr. Madoff through so-called feeder funds that placed client money with him will also get relief. These funds will be allowed to claim the theft-loss deduction but will allot those losses proportionally to individual investors.
The I.R.S. said it did not know how much money in taxes investors had paid in recent years on Madoff-related income. It said that investors who had already filed 2008 returns should file amended returns claiming the theft-loss deduction.
Tuesday, March 17, 2009
BY ROBERT E. KESSLER firstname.lastname@example.org
March 13, 2009
Fifty miles from the Manhattan courtroom where Bernard Madoff pleaded guilty to the biggest Ponzi scheme in U.S. history, attorneys in a federal court in Central Islip Thursday described the victims of an alleged Long Island-based Ponzi scheme and their efforts to recover millions of investor dollars.Trustee Kenneth Silverman and attorney Ronald Friedman were in federal bankruptcy court to give an interim report to Judge Dorothy Eisenberg on their progress in identifying investors and recovering the $370 million authorities say investors placed with Nicholas Cosmo and his private bridge loan company Agape World Inc. of Hauppauge.While Madoff had many affluent clients -- who in many cases lost millions of dollars in his multibillion-dollar scheme and were concentrated in a few pockets of wealth around the world -- by contrast, Cosmo's investors were average folks who invested "at most between "$10,000 to $20,000," Friedman said.He added that Cosmo's investors were mainly scattered throughout North America, "very widespread [from] Canada, Puerto Rico, Florida, California, New York."
"A cousin in South Carolina [would call] a sister in Florida," Friedman said, and both would end up investing in Agape.Cosmo has been charged with fraud in a separate federal criminal case and is being held in jail in Nassau County. He has not had to enter a plea and has not had a lawyer representing him in the bankruptcy case.Federal prosecutor Grace Cucchissi declined to comment Thursday. But Silverman and Friedman told Eisenberg that federal prosecutors had been very helpful, allowing them access to the voluminous records that were seized when Cosmo was arrested in January.As a result, the attorneys said they may have identified more than 5,000 people who were potentially entitled to portions of any Agape assets they can locate and sell off.Among assets they said they already plan to auction are the furniture in Agape's offices; $200,000 worth of hardwood flooring used during the 2004 NCAA basketball tournament that was apparently intended for Cosmo's $3.5-million sports complex in Hauppauge, as well as the complex itself; and baseball memorabilia, including baseballs signed by New York Yankees shortstop Derek Jeter and the Mets' David Wright.Silverman said, however, that any attempt to recoup money relating to two instances in which Cosmo apparently used Agape money improperly would be handled with "great sensitivity."One involved the tens of thousands of dollars spent on turf for a youth ballfield in Seaford; the other a Levittown house Cosmo allegedly helped buy for a woman who had survived cancer.
Sunday, March 15, 2009
If this Agape mess has brought you to the point of desperation and you "must" sell your home or homes, I'd be happy to put your home on the "Long Island MLS system" and waive the listing fee (if you live outside the 5 boro's, nassau and suffolk I cant help you - sorry - But I would gladly try to find you someone in your area that will).
Let me explain:
Typically, listing agents collect 50% of the eventual total commission earned when a selling agent brings a buyer,an offer is presented, accepted, goes to contract and eventually closes.
I cant save you the "selling brokers" fee (50%), because that goes to the other broker, But I'll gladly waive mine.
I hope none of you has to take me up on the offer, but rest assured the offer stands if you need it.
Saturday, March 14, 2009
It's my opinion, that we as a collective group should petition the court for ownership of the facility.
Friday, March 13, 2009
Present at the hearing yesterday were partners Mr. Kenneth P. Silverman and Mr. Ronald J. Friedman of SilvermanAcampora LLP.
The Law Firm of SilvermanAcampora LLP was appointed interim trustee by the courts on Feb 12th.
Joining the team was our good friend Rachael E. Dioguardi. Rachael has been tremendously gracious about answering any questions from our group when needed.
The main purpose of the hearing was for the firm to present to the Bankruptcy court the status of their investigation, findings, details of any activities and some of their short term plans. Mr. Friedman presented a very detailed and methodical account of what they have uncovered in terms of how the Agape business operated. He spoke with clarity and definition about how the Ponzi scheme was started, how the monies came in and how they were paid out.
In this presentation Mr. Friedman made several references to the Brokers and Sub brokers.
According to the Trustees research, the "ponzi" scheme when eventually shut down by Cosmos arrest had reached the point where there was international exposure.
Note: After an attorney has filed a bankruptcy petition, under either Chapter 7 or Chapter 13 (in our case Chapter 7), Agape will be required to attend a meeting of their creditors. This meeting is called a "341 meeting" after the section in the bankruptcy code that requires it.
The meeting is usually scheduled about 20 to 40 days after you file for bankruptcy. Mr. Silverman is looking to have that meeting scheduled sometime around the first week in April. A letter to ALL creditors will be sent out informing them that this meeting is scheduled.
On a good note, It was reported that the trustee will be launching an informative web site where important information will be posted as well as any ongoing updates on the current activities of the office. This is something I believe our group triggered. It was suggested many times to Rachael that the lack of information to the investor is causing unnecessary angst which most likely resulted in hundred of calls to their offices and if they are on the phone answering the same questions over and over again then they are not working on our case.
It was also reported..............
· that in the end (December 2008), Agape was pulling in more than $20 million per month in investor monies. That most investments were in the $30K – $75k but there were a few that were in the high 100's of thousands.
· that Cosmo was the ONLY principal in the Agape business and that he had several employees and commissioned brokers who help run the business with him.It was also noted that the trustee's office has not had the opportunity to speak directly with Cosmo for further investigation. As suggested by the judge, the Trustee office will schedule a meeting with Nick Cosmo after the 341 meeting which is required by law
· by the Trustee that they felt they were getting very good cooperation from the US Attorney's Office and Security and Exchange Commission. By way of a search warrant, the US Attorney's office confiscated the books and records of Agape and the trustee's office has full access to those books and records. Within these books and records were various contact list and employee/broker lists.Mr. Silverman stated that after reviewing all the relevant books and records of Agape and other sources of information to date, that:
- the business was running from 2004 thru 2008
- there were about 5500 creditors/parties of interest 370 million dollars was brought into the company over that time. It was further clarified that the 5,500 creditor number was a total of all investors, trade creditors and vendors who might potential have a stake in the restitution.
It was also clarified that although the number is high, it did include investors who:
- potentially might have already received ALL of their principal back
- some who received partial principal back
- some who received principal and interest and
- some who have not received any money back
· that Agape did indeed provide about 15-17 legitimate loans to 3rd parties from 2006 thru 2008. These loans amounted to about $20 million but they cautioned that each one was in a very different stage of completion and that recovery of these monies to the Agape restitution pool could present a challenge. Some have filed breach of contract against Agape, some are at a complete standstill and some are due to be complete in the coming months.
· that 80 million of the 370 million dollars was traded and lost in commodities future trading thru many
brokerage accounts that are directly traceable. These accounts were either in Agape's name or Nick Cosmo's name directly.
· that SIPC is the first line of defense in the event a brokerage firm fails owing customer's cash and securities that are missing from customer accounts. Nick and or Agape were not a license securities broker so SIPC does not apply.
· The trustee asked the courts assistance in issuing a 362 stay against all current and future lawsuits filed against Agape. STOP!!! is the message of the automatic stay to virtually all of a debtor's creditors, secured and unsecured, when a petition under any chapter of the Bankruptcy Code (e.g. Chapter 7, 11, or 13) has been filed by or against the debtor. The automatic stay, in section 362(a) of the Bankruptcy Code, is the bankruptcy equivalent of a temporary injunction against virtually all creditor activity that may hinder the trustee in his attempt to recovery monies. What was interesting is that D&B, Entrepreneur Mag etc… are NOT directly connected to the Agape ponzi scheme and those suits can not be stopped by the Trustee's office via a 362 injunction.
· that there are some cases where Agape made payments to 3rd parties (Speranza and Cosmo Sports Facility) where there was no mortgage and thus no 1st lien. In these cases it was reported that Agape had a vested interest in these properties and that Agape received either direct ownership or stock in these entities. They believe the sports facility is worth about $3.5 million and that Agape also paid for all the build outs to ensure the property could open.
· that the trustee has requested a motion to invoke Rule 2004 against several entities (Bank of America and Citi Bank). Thru granting the 2004 motion the court orders full examination of an entities books and records.
· that the trustee is investigating a turf baseball field that Agape paid for that is owned by the Levittown, Wantagh, and Seaford sports league.
· that the trustee is investigating the purchase of NY Jets/NY Giants season tickets. The expectation is that the Jets and Giants will provide a full refund.
· that the trustee is investigating the purchase of USGA tickets. The expectation is that the USGA will provide a full refund.
· that creditor body is totally un-secured which means that the only true creditors are the investors themselves.
The trustee is looking to engage an accounting firm to help them with this case. They have one in mind and asked the courts permission to move ahead with retaining them.
After an attorney has filed a bankruptcy petition, under either Chapter 7 or Chapter 13 (in our case Chapter 7), Agape will be required to attend a meeting of their creditors. This meeting is called a "341 meeting" after the section in the bankruptcy code that requires it. 11 U.S.C. 341. The meeting is usually scheduled about 20 to 40 days after you file for bankruptcy. Silverman is looking to have that meeting schedule sometime around the first week in April. A letter to ALL creditors will be sent out informing them that this meeting is scheduled.
Bob and Dom
Thursday, March 12, 2009
If Northway fails, the trustee gets us a bright shiny nickel.
If the sports complex is sold, we might even get a brand new "dime".
Here's a Question:
Why dont we push the trustee to free up the projects and let them be funded with us holding second positions and equity stakes.
These three - or at least two out of three - can actually become a potential future source of income for us.
If they're sold at auction, we won't even feel the difference.
Please dont write me if you disagree. Just ignore me.
But if you agree, write to the Trustee.
The Judge was clear about keeping the trustee on the right track towards the greatest recovery of victims lost assets.
The Interim Trustee and his team outlined their past and present activity, along with their future plans to facilitate a speedy recovery.
They seems to have done considerable research but are nowhere near completion.
The trustee announced that they would be launching a victim friendly website sometime next week for updates and cooperative interaction between his office and the victim group.
It was also suggested by the trustee and agreed upon by the court that Mr Silverman (trustee) would hire some accounting firms to assist in the tracking and analysis of the Agape funds and assets.
I believe strongly that we need to re-emphasize our need to be included in the process of determining the fate of the recovery.
I'd like to see the Trustee appoint a committee of victims to act as liasons between his office and our group.
We can surely be of great assistance in gathering data, information and potential leads for his office to develop at "no cost" to the groups eventual recovery.
Be sure to send the Trustee the questionarre and perhaps a letter stating your position on any of the asset recovery plans.
Topics to consider:
Can and will clawbacks be implemented?
Will the IRS or other government agencies return taxes paid by agape, brokers or investors to the victim pool?
Will the Trustee sue third parties for negligence? Or support the suit by other law firms?
For many weeks we have advocated a sit and wait position.
That time has passed.
Start calling and writing to your Senators, Councilmen, legislators, News media etc.
I would even advocate "letters to the president".
Lets make the country aware of our situation.
Don't make the mistake of thinking that anything will get done without your individual efforts.
It will take every one of us working towards a common goal to see this thing succeed.
290 Federal Plaza
Central Islip, N.Y. 117227th Floor
I don't have any other details.
so please don't flood my box with questions.
go to this website for any other details
Wednesday, March 11, 2009
We were lied to and cheated.
I'm going to suggest... that we start a letter writing campaign aimed at demanding the government:
- Push the trustee to step us his game (there are many avenues of assets that are to date left unencumbered
- Push the Attorney General to subpoena all third party records to ascertain any collusion between agape and said third parties
- Create a fund to assist the elderly or widows with children affected by this theft
- Put together a task force to come up with creative ideas on how to make us whole
Senator Charles “Chuck” Schumer
United States Senator
for the State of New York
United States Senate
313 Hart Senate Building
Washington, D.C. 20510
New York, NY 10017
for the State of Washington
United States Senate
511 Dirksen Senate Office Building
Washington, DC 20510
Seatle, WA 98174
Senator Robert Menendez
United States Senator
for the State of New Jersey
United States Senate
528 Senate Hart Office Building
Washington, D.C. 20510
One Gateway Center, Suite 1100
Newark, NJ 07102
They need to get 1500 letters telling them that we have a voice.
Lets not let them shut us down.
If we stay quiet to long, there will not be a chance to speak up later.
We had a good meeting with Jake Zamansky yesterday. He has put together a team of specialists from law firms in Washington, D.C. and New York City, to help him prosecute a case on our behalf against any third party entities that helped facilitate the fraud perpetrated by Agape.
His team explained to us that to prevail in that case we will have to establish that these third parties provided “substantial assistance” to Agape. Jake and his team are working hard to investigate and gather facts to demonstrate that third parties should be held accountable for our losses.
To that end, if any of you have information regarding the role played by third parties it would be helpful to pass that information to us so that we can advise the attorneys.
Jake and his team are hoping to file a case on our behalf within 30 days but will not proceed until all legal theories of relief and potential defendants are fully investigated and researched.
We discussed some of the other cases that have already been filed by other law firms and it is clear those cases against Cosmo and his closest associates have little chance of recovering any substantial funds.
No decision has been made as to whether the case should be brought on behalf of a class of all investors or a smaller group of individuals. The pros and cons of each approach were explained to us in some detail. The legal team explained that their initial focus is on building the facts of the case first and then deciding on the precise legal form it will take.
We appreciate the methodical approach they are taking and look forward to reporting progress in the weeks ahead.
Thank you all for your continued assistance and cooperation.
Tuesday, March 10, 2009
Schumer specifically questions why the SBA said yes to the loan requests when, as part of the process, the agency asks about prior convictions. Agape World chief Nicholas Cosmo had been convicted of fraud and spent 21 months in prison.
The New York senator said he’s demanding an explanation and wants the SBA to investigate the matter.
Cosmo was arrested for fraud again earlier this year and is accused of stealing $370 million from investors.
March 1, 2009
Agape World, the Hauppauge investment firm that authorities say was operated as a $370-million Ponzi scheme, got a helping hand from the federal government with two Small Business Administration-backed loans totaling more than $100,000, the agency's records show.The loans for $53,300 in 2002 and $50,000 in 2005 - made by private banks and insured by the federal government - were approved even though Agape World president Nicholas Cosmo had been convicted in 1999 on a federal charge of fraud and swindle.Cosmo was required by law to disclose his criminal history on applications for government backing. Mike Stamler, a spokesman for the Small Business Administration, said Friday night that he did not have access to the loan applications that would show what Cosmo indicated.Sen. Charles Schumer (D-N.Y.) said approval of the loans raises "troubling" questions about the Small Business Administration's vetting process. In a letter on Friday, Schumer called on Small Business Administration Inspector General Peter McClintock to conduct an investigation.
"It was almost as if the SBA was an unwitting accomplice in a crime that bilked Long Islanders out of millions," Schumer said in a statement, adding: "The SBA needs to do a top-down review of its vetting process because, with credit in such short supply, we cannot let another loan go astray."Cosmo, 37, of Lake Grove, has been charged with one count of federal mail fraud and is being held until a bail package can be negotiated. Agape World investors believed they were funding high-interest commercial loans, but federal prosecutors say few loans were made and Cosmo instead used investor money to pay off subsequent investors in a classic Ponzi scheme.McClintock did not return a call Friday. Stamler declined to say if a probe was under way.Cosmo's attorney, Stacey Richman, said she could not comment because she was not aware of the loans.Stamler said criminal background checks generally are only conducted when an applicant states on a loan application that he has been convicted of a crime. That information then is checked by the agency and the FBI, Stamler said. For applicants who state they have not been convicted of a crime, no further action is usually taken, he said."It has occurred, but it's not automatic," Stamler said. "That's how we go about it."If Cosmo did reveal his criminal background on SBA Form 912 "Statement of Personal History," the application says it would not necessarily have disqualified him.Cosmo's conviction came on Jan. 1, 1999, when he pleaded guilty to one count of fraud and swindle for misleading investors while a licensed stock broker at Continental Broker-Dealer, a now-defunct Carle Place company. According to a National Association of Securities Dealers complaint, Cosmo replaced a client's account with an account over which Cosmo had control and transferred the client's funds into that account, without the client's consent or knowledge.Cosmo was sentenced to 21 months at Allenwood Federal Correctional Complex in Montgomery, Pa., and had his NASD license revoked. He also agreed to "intensive outpatient gambling therapy" and to pay restitution of $177,000. Separately, the NASD fined Cosmo $68,000.Stamler said the Agape loans were part of the SBA's guaranteed loan program, which insures loans made by private banks to applicants seen as credit risks. Stamler said he did not know which banks gave the loans or how much was dispersed to Agape World.THE AGAPE WORLD CASEThe alleged scam: Federal authorities say Nicholas Cosmo, president of Hauppauge-based Agape World Inc., told investors their money was invested in high-interest commercial loans, when in fact the money was mostly funneled to new investors, bet on improper commodities trading and even funded NT Baseball, a youth league in Seaford. Cosmo, 37, of Lake Grove, who has pleaded not guilty to mail fraud, is being held as a bail package is being negotiated.Government help: Federal records show that Agape World was approved for Small Business Administration-backed loans of more than $100,000, even though Cosmo had been convicted of fraud in 1999. Sen. Charles Schumer (D-N.Y.) has called for an investigation.The profits: Authorities say Cosmo paid employees who brought new investors into the company more than $55 million in commissions in the last five years. An investor lawsuit alleges the money was used on luxurious homes, jewelry, flashy cars and expensive vacations.Bankruptcy Court: Angry investors sent Agape World into Chapter 7 bankruptcy, and a court-appointed trustee charged with recovering lost funds now is conducting his own probe. His targets include a youth sports arena in Hauppauge owned by Cosmo, an Italian restaurant in Woodbury co-owned by Cosmo and businesses owned by Agape World employees
An Agape World investor filed a $5-million lawsuit yesterday against Dun & Bradstreet, accusing the venerable business information firm of misleading the public about the Hauppauge company that federal authorities allege is part of a Ponzi scheme.Meanwhile, the attorney overseeing the Agape World bankruptcy has moved to force into Chapter 7 bankruptcy five other companies owned by accused swindler Nicholas Cosmo. A hearing will be held in U.S. Bankruptcy Court in Central Islip at 2 p.m. Thursday on whether to include Agape Merchant Advance, Agape World Bridges, Agape Community, Agape Construction Management and 114 Parkway Drive South Llc. "We're going to give an extensive status report to the court indicating what litigation and what investigations we have commenced," said Agape bankruptcy trustee Kenneth Silverman.John Scherillo, a construction contractor from East Northport, said he bought a Dun & Bradstreet report on Agape World in September 2008 when he was reconsidering his $50,000 investment, according to the lawsuit filed in U.S. District Court in Central Islip.
The D&B Comprehensive Plus Report said Agape World was unlikely to stop paying investors and was unlikely to experience financial distress in the next 12 months, the suit said. On Sept. 22, six days after receiving the report, Scherillo decided to maintain his $50,000 investment and invest an additional $25,000, the suit said.Four months later, federal authorities arrested Cosmo, charging him with mail fraud and accusing him of running a $370-million Ponzi scheme through his companies Agape World and Agape Merchant Advance. Cosmo is being held at the Nassau County Correctional Center in East Meadow while his attorney and federal prosecutors try to arrange a bail package.The lawsuit accused Dun & Bradstreet of gross negligence, saying it failed to "conduct a proper investigation" or "a reasonable and diligent evaluation of" Agape World. The suit asks for $150,000 in compensatory damages and $5 million in punitive damages.Ana Cano, a spokeswoman for Dun & Bradstreet, declined to comment yesterday. Scherillo did not return calls. His attorney, Eliot Bloom of Mineola, was traveling yesterday and could not be reached.Dun & Bradstreet is typically used by businesses to evaluate other businesses and not by potential investors. But some Agape investors have said the favorable Dun & Bradstreet reports - along with Agape's appearance on Entrepreneur Magazine's "Hot 100" list of fast-growing businesses and its membership in the trade group Commercial Finance Association - lent the company undue credibility.
Monday, March 9, 2009
March 9 (Bloomberg) -- New Jersey investment company Serafino Holdings LLC and its owner Anthony Lucchetto Jr. were accused in a complaint by regulators of operating a $15 million Ponzi scheme linked to the alleged fraud of Nicholas Cosmo.
State Attorney General Anne Milgram sued Serafino and Lucchetto for selling unregistered securities invested in construction loans, according to a complaint in state court in Elizabeth, New Jersey. Serafino told investors he would put their money in “completely safe” certificates of deposit with a “capital protection program,” according to the complaint.
Serafino told investors on Jan. 27 that he had put their funds into Agape World Inc., a company run by Cosmo, who was arrested a day earlier and accused by federal authorities of operating a five-year, $370 million Ponzi scheme. In a Ponzi scheme, money from new investors is used to pay old investors.
“Lucchetto and Serafino Holdings, through Lucchetto, misappropriated a large portion of the investor funds by transferring them to Agape World and Nick Cosmo, now known to be an alleged Ponzi scheme, and there was no such safe investment or insurance program,” according to the complaint filed March 4.
Lucchetto, who lives in Plainfield, New Jersey, was a registered agent and investment adviser for Metlife Securities Inc. until his licenses expired April 30, according to the complaint. He held himself out to investors as a certified financial planner, according to the complaint.
Serafino’s customers included a family that invested funds from their pizzeria business, custodial accounts for their five children, and an IRA account, according to the complaint.
‘Innocent Young Man’
Lucchetto attorney William Hood III said today his client is “an innocent young man” who set up his business in Fanwood, New Jersey, about a year and a half ago. Lucchetto invested money with Cosmo without knowing he was operating a Ponzi scheme, Hood said in an interview.
Hood said that Lucchetto and his family lost about $3 million and “have the biggest interest in making sure there’s a recovery.”
Cosmo is being held without bail after his arrest on a criminal complaint by the U.S. Postal Inspection Service. The Federal Bureau of Investigation also is probing Cosmo and Agape.
Lucchetto “did his due diligence,” Hood said. “He went out and looked at Cosmo’s files and he was convinced it was solid, or he wouldn’t have put his own money or his investors’ money in there. The FBI has asked us to show them all the material that Agape World showed us in order to induce us to invest. We’ve done that.”
Several investors sued Lucchetto in a private lawsuit in Elizabeth, Hood said. Lucchetto has retained a New York law firm to work with a court-appointed receiver on the Cosmo case to try to recover money for Serafino investors, Hood said.
“He’s getting blamed by these investors, and they’re angry,” Hood said. “Obviously, these are bad times and we’re trying to do the best we can to try and help people.”
The case is Anne Milgram v. Anthony Lucchetto Jr., C-32-09, Superior Court of New Jersey, Union County (Elizabeth).
To contact the reporter on this story: David Voreacos in Newark, New Jersey, at email@example.com.
Guide to Mezzanine LendersTurn to mezzanine lenders to finance a large project quicklyBy Linda C. Ray
Guide to Mezzanine LendersTurn to mezzanine lenders to finance a large project quicklyBy Linda C. Ray
Mezzanine lenders are investors who see the potential in your project as clearly as you do and are willing to put up hard money for a stake in the project. Most mezzanine loans are made by real estate mezzanine lenders who buy in for a share of the stock in the property, as well as both real and residual profits.Mezzanine loans are typically based on the practicality and profitability of the project and not on your credit rating. They can be done with little due diligence and are very safe for the mezzanine financing lenders, who can foreclose on your stock in a matter of days if you miss any payments. Turn to mezzanine lenders for capital to:1. Leverage equity with a mezzanine lender for an existing real estate project2. Purchase a dormant office building that has huge potential with real estate mezzanine lenders3. Build a hotel on a hot property through mezzanine loans
Action Steps The best contacts and resources to help you get it done
Turn to mezzanine loan providers for quick cash to grow your business While you may not have enough equity in a property to get a decent line of credit from a bank, a mezzanine lender can cover your cash needs quickly in return for a high note in stock if you default on the real estate mezzanine loans. A mezzanine loan will show up on your financials as an investment rather than a debt, making the deal even sweeter. I recommend: Agape World offers low rates for bridge loans secured by stock that meets the mezzanine loan definition. Commercial Lending Group is a worldwide provider of real estate mezzanine loans with a quick online application.
Draw upon your experience to secure mezzanine loans Often, an experienced real estate developer can attract eager mezzanine loan providers based on a successful history of picking winners. A seasoned developer can see potential in a poorly managed property and receive a large percentage of the capital to purchase the property from real estate mezzanine lenders. I recommend: American Capital is an international mezzanine lender always looking for pros with whom to partner. Gelt Financial specializes in commercial and investment properties as mezzanine financing lenders.
Get a payoff for your keen sense of timing for a new hotel development with mezzanine lending When the financial markets are soft in a particular industry such as hotel development, international mezzanine lenders and local mezzanine loan providers are more willing to take the risk and reap the bigger rewards with you. Look for mezz lenders who take the big risks and will trust your track record. I recommend: Ocean Pacific Capital can act as a conduit to help you find the right real estate mezzanine loans for your hotel development. Private Equity Info provides an in-depth database of mezzanine real estate lenders.
Tips & TacticsHelpful advice for making the most of this Guide
Beware of the smooth talkers in the mezzanine lending companies who make promises that sound too good to be true. There is a price for every loan. Be sure to enter into the agreement fully aware of all the consequences of a default.
Sunday, March 8, 2009
Point and click at the link here and notice the type of people and companies who were hoodwinked by the madoff ponzi.
Certainly, Cosmo wasnt madoff, but we aren't steven spielburgs either.
Saturday, March 7, 2009
As you can see and perhaps it was coincidence, two of these properties are in the process of being seized.
Once again, I'd like to suggest that you forward to my personal email address (firstname.lastname@example.org)any ANY info you might have on the location of any cosmo or broker assets.
Our management team will do the rest.
March 7, 2009
Federal prosecutors moved Friday to seize two homes from one of the chief lieutenants of imprisoned Agape World Inc. company chief Nicholas Cosmo - opening a new front in the case of an alleged $370-million Ponzi scheme centered on Cosmo's Hauppauge investment advisory business.
Previously, federal officials had identified only Cosmo in the alleged scam. He has been held since his arrest in January.In civil court papers filed in Central Islip, federal prosecutors said the two homes owned by Jason Keryc should be forfeited to the government because "virtually all of the ... monies received by Keryc [from Agape] consisted of investor funds and are thus proceeds of the Ponzi scheme." "In furtherance of such scheme, Cosmo, Keryc and other individuals associated with Agape ... solicited thousands of individuals for investments with false representations and promises of annualized rates of return of approximately forty-eight to eighty percent," the papers said.
The two properties are at 1 Wills Point Rd. in Montauk, and at 369 W. Broadway in Long Beach. Property records list the Montauk home as valued at $2.5 million and the Long Beach home at $698,000.Keryc, who was not charged with any crime in the civil papers, could not be reached to comment. His attorney, Frank Murray of Rockville Centre, said, "I can't comment because of the pending investigation.
"Federal prosecutors Grace Cucchissi and Vincent Lipari declined to comment.
Keryc has been identified in the past by prosecutors only as R-1, a Cosmo associate who made $15,225,000 working for Agape World between March 2005 and November 2008; $14,600,000 alone between January of 2007 and October of 2008.
In Friday's filing, he was named and described with the same earnings and dates.In past government papers, R-1 also was identified as "one of the top earning representatives in the company and he has several sub-representatives who work on his team." The sub-representatives have not been identified.
In a related development Friday, federal Magistrate Arlene Lindsay granted a month's delay in the requirement under the speedy-trial act, which mandates a person arrested to be indicted within a short time.Lindsay acted on the request of both Cucchissi and Cosmo's attorney, Stacey Richman. Richman said she had not been able to go through all of Cosmo's records seized by the government to get the full extent of the case.
Cucchissi said she was also continuing to work on how many victims were involved. So far Cucchissi said the government believes that 6,000 people had invested in Agape, but only 2,000 have been identified by the government.Not all of the 6,000 might be victims, she said, because typically in a Ponzi scheme some people get high returns to lure others in.
Richman also said she was still working to come up with a bail package that would satisfy the court so that Cosmo can be released.
Where did the media get the $380,000,000 number? (multiple choice)
a. did cosmo suggest it (and we all know how honest he's been)?
b. did the fbi/postal inspector/trustee find records of it?
c. did the brokers get together and figure out the take?
d. did the media hear it somewhere and turn it into fact???
e. none of the above
When will the trustee know the numbers for sure:
1. deposits in total ?
2. disbursements to investors (principle or interest or whatever)?
3. commissions to brokers?
4. operating expenses?
5. loans given to developers
6. money invested in promac
7. funds paid back from developer loans
8. interest paid to agape from promac investments
Is that too much to ask ?
Friday, March 6, 2009
Thursday, March 5, 2009
THROUGH IRC SECTION 165 (c)(2)
FACTS – CURRENT TAX LAW HELPING VICTIMS OF INVESTMENT THEFT
Current law includes but is not limited to, the following facts:
IRC 165 (c)(2)
• Law was established in 1954 to help investment fraud victims recover a portion of their losses through tax.
• Deduction allows qualifying victims to take their total net loss against ordinary income in a single year.
• Deduction allows for the taxpayer to go back three years after declaring the loss in the “Year of Discovery” if a Net Operating Loss (NOL) remains, or, they can waive their right to go back, and carry the NOL forward up to 20 years.
• Deduction allows for up to a 20 year carry forward, with the exception of when the 3 year carry back is utilized, which subsequently creates the potential for a 23 year benefit.
• Losses in IRA and Pension Funds Do Not Qualify.
• The taxpayer must prove the investment was made and lost by reasons of theft as defined in the state where the transaction took place.
• Taxpayer must exhaust all reasonable means of recovery.
• Taxpayer must be able to prove privity (there was a first hand relationship between the thief and the victim) in order to qualify. Ponzi scheme victims are generally not held to this requirement but that I’m aware, that exception is not written as fact.
• (Some) IRS agents consider any form of pending legal action (individual, class action, federal indictments, bankruptcy or receivership) as potential recovery and will deny a claim until such time as that open pursuit of recovery is resolved.
• IRS requires a victim to provide proof of cost basis (copies of checks, front and back, wire transfer confirmations, disbursements, withdrawals, recovery, etc.).
• Taxes on phantom income are recoverable in full but are only allowed to be carried back 3 years. The balance (NOL) can be carried forward up to 20 years.
FICTION – MISINFORMATION COMMONLY GIVEN TO THE PUBLIC
• Before a taxpayer can claim a deduction, they must first exclude 10% of their Adjusted Gross Income and $100 per item – Wrong. Although originally an aspect of the deduction, this exclusion was eliminated 25 years ago by the Tax Reform Act of 1984.
• 2 Year Net Operating Loss Carry Back – Common misconception. Other than in 2002, when Congress allowed an exception allowing for 5 years, the carry back has always been 3. The 2 year carry back does not apply to investment losses caused by theft.
• Up to 50% recovery of loss – Misleading. In my experience, taxpayers should expect to receive a total benefit between 10 – 20% of their loss.
• The deduction is taken in the year victims discover the money is gone – Maybe but not likely.
• The deduction is simple to obtain – Really? It takes a knowledgeable and experienced 165 tax preparer to guide both taxpayers and the IRS agents through this process
FUTURE – NEW PROPOSED LEGISLATION
For some time, I have been trying to get Congress to see the need for changes in the law. The size of the Madoff ponzi scheme helped me with my mission to get congress attention. In doing so, they are now discovering how prevalent investment theft and ponzi schemes are in America. Congressman Kendrick Meek of Florida’s 17th district moved quickly and proposed new legislation on February 24, 2009.
Proposed changes to current tax law.
• Will allow a 10 year carry back (or length of time in fraudulent investment, whichever is lesser) on cost basis and taxes paid on phantom income verses the current carry back of 3 years. Given the fact that a great deal of injured investors are in the retiree/elder categories and have had little to no income over the last several years, this change will hopefully increase the chance of them reaching a year where significant taxes were paid.
• Proposes to provide assistance to individuals who contributed to charitable organizations. This is a new aspect to the law and it needs to be further examined in order to determine just who gets what benefits?
• New legislation uses the word “estimate” verses “ascertained”. This may be a big help in the filing of the claims in a reasonable amount of time, but it is not definitive and more work needs to be done.
A Hauppauge commercial lender once touted as the "exclusive" partner of Agape Merchant Advance - which authorities say was part of a Ponzi scheme - was ordered by a federal judge Wednesday to open its files to a bankruptcy trustee, court records show.
The lender, Professional Merchant Advance Capital Llc, or ProMAC, once listed itself as being run out of 150 Motor Pkwy., in the same suite as Agape Merchant Advance and Agape World - two companies owned by Nicholas Cosmo, accused by federal authorities of using the firms to run a $370-million Ponzi scheme involving about 1,500 investors.
Kenneth Silverman, the Jericho attorney appointed to oversee the Chapter 7 bankruptcy of Agape World, told Newsday yesterday he wanted to know if Cosmo had an "ownership interest in ProMAC" and whether Cosmo made "loans to ProMAC in support of its business platform."
U.S. Bankruptcy Judge Dorothy Eisenberg, sitting in Central Islip, yesterday granted Silverman's request.
see full story below:
Eisenberg's order came amid other Agape developments:
Silverman said Wednesday foreclosure proceedings have begun against a Louisiana company, United Steel Supply Inc., that defaulted on a $1.4-million loan from Agape World. The company did not respond to a phone message.
(doms note; This is interesting since we were all told that this bridge loan closed successfully)
Agape World officially went into Chapter 7 bankruptcy yesterday, and a meeting at which Silverman and creditors may question Cosmo or other Agape principals was scheduled for March 30 at 9:30 a.m. at the U.S. Bankruptcy Court. Silverman said Cosmo may not attend because of the federal criminal proceeding.
(doms note; we need to know if we can attend)
Three U.S. senators, including Charles Schumer (D-N.Y.), called for Senate hearings on changing laws to make it easier for Ponzi victims to recover their losses.
(doms note; write to your senator and endorse the effort).
Wednesday, March 4, 2009
SCHUMER, CANTWELL, MENENDEZ CALL FOR FIRST CONGRESSIONAL HEARINGS INTO WAYS VICTIMS OF PONZI SCHEMES CAN BE HELPED
Families, Small Businesses, Charities, and Pension Funds Among Innocent Victims of Ponzi Schemes – Madoff Scheme Cost Investors $50 Billion, $350 Million Scheme Recently Uncovered on LI
Schumer, Cantwell, Menendez Call for Senate Finance Hearing to Examine Ways the Federal Government Can Help Institutions Recoup Losses, Protect Against Future Scams
Today, U.S. Senators Charles E. Schumer (D-NY), Maria Cantwell (D-WA) and Robert Menendez (D-NJ) announced they have requested that the Senate Finance Committee conduct a first ever hearing in to ways the federal government can help innocent victims of the recent rash of multi-million ponzi schemes recoup some of their losses. The Senators said that families, small businesses, charities, and pension funds were just some of the countless innocent victims of the massive ponzi scheme involving billions of dollars. The largest ponzi scheme, run by disgraced financier Bernie Madoff, cost investors more than $50 billion. The Senators however pointed out that there are many other similar schemes that have been uncovered including one on Long Island that robbed investors of more than $350 million.
“Virtually overnight, entire savings, retirements, and pension accounts were wiped out, leaving the financial well-being of thousands of families and institutions in peril. These victims were not only sophisticated financial professionals, but also ordinary people who believed they were making safe, responsible investments for their future,” Schumer said.
"The financial security and future for the thousands of victims of these unprecedented schemes is now up in the air," said Cantwell. "The Finance Committee has a duty to have an open discussion as to how these victims were duped and whether they can recover any of what was stolen from them."
“Families, charities and retirees – people who live and work far away from Wall Street – have been utterly devastated by the collapse of this house of cards," said Menendez. "Many have been left with nothing in the midst of the worst economic crisis of their lifetime. They are now also coming to the realization that, for years, they’ve been paying taxes on phantom investments. It is their right to know if there is a remedy for what seems to be an injustice.”
In their letter to Senate Finance Committee Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA), the Senators wrote that the Madoff affair as well as other ponzi schemes have brought to light several complicated issues that lie within the jurisdiction of the Finance Committee. The Senators outlined five different areas the committee should examine during the hearing:
1) At time since Mr. Madoff’s arrest, as former clients attempt to assess and make sense of the massive fraud, several questions have arisen about provisions of the tax code that apply to victims of theft, including when the Madoff victims could avail themselves of that relief. The Internal Revenue Code's “theft loss” deduction could allow Madoff’s victims to recoup a substantial share of what they lost—the deduction is equal to the full loss less 10 percent of Adjusted Gross Income and a $100 fee. So if an individual investor lost $750,000 with Madoff and has an annual income of $100,000, he or she would be able to claim a loss of $739,900. However, while a theft loss typically is claimed in the year it is discovered, the Code stipulates that a loss cannot be claimed until it has been determined with “reasonable certainty” that the claimant will not be able to recover any of the loss. Given that the investigation of Madoff is ongoing and is unlikely to be resolved for several years, there is a great deal of uncertainty among investors about whether and when it is appropriate for them to claim the deduction.
2) Madoff’s clients were sent bogus earnings statements showing “phantom income” on dividends that were reinvested with Madoff’s fund. These taxpayers paid the taxes they thought were due, but in reality there was no income. There is tremendous uncertainty about whether these individuals can file amended returns to recoup those taxes paid in past years. For instance, several of their constituents have asked whether the IRS will allow this procedure, under what circumstances, and for how many past years.
3) There are potential tax implications for investors who cashed out before the alleged Ponzi scheme was revealed. Based on the legal principle of “fraudulent conveyance” and the precedent set by the Bayou Group fraud, there is an open question about whether this group of investors may have to return some or even all of the amount they received by cashing out portions of their investments before the fraud was revealed.
4) There are issues involving the Securities Investment Protection Corporation (SIPC), a nonprofit organization created by Congress in 1970 and funded by the securities industry. Ostensibly, SIPC covers losses up to $500,000 resulting from securities fraud. SIPC is within the jurisdiction of the Banking Committee, but it is unclear whether it covers individuals who invested with Madoff indirectly, such as the many Taft-Hartley union pension plans in our states that invested millions with Madoff’s funds and are now in serious financial trouble as a result.
5) The Madoff scheme has impacted more than 150 private foundations. It is unclear whether these foundations will be forced to pay onerous excise taxes as a result of the fraud. A sizeable tax hit would be especially problematic for foundations that are already in dire financial straits.
Section 1102(a) of the Bankruptcy Code charges the United States Trustee with the duty of organizing and appointing a committee of creditors holding unsecured claims. The creditor's committee does not "run the business" or otherwise control the assets of the debtor's estate. The debtor in possession (or trustee, if one has been appointed) is in control. It is assumed that the committee will represent the interests of all unsecured creditors and attempt to maximize recovery for all unsecured creditors in its negotiations with the debtor, the secured creditors, and other parties in the case. In order to aid the unsecured creditors' committee in accomplishing these goals, the Bankruptcy Code specifically sets out certain duties and powers of a committee. The Bankruptcy Code specifically provides that a creditors' committee may:
1. Review the progress and status of the case and discuss the same with the debtor. Also, the debtor is required to file periodic financial reports with the Court and the Office of the United States Trustee. These reports should provide valuable information for the committee.
2. Investigate the financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of the business.
3. Participate in the formulation of a plan.
4. Ask the Court to appoint an examiner in the case. An examiner is a professional (often a CPA) with the expertise to investigate the business and file a report drawing conclusions regarding the viability of the same, the competence of past or current management, possible fraud, etc.
The Bankruptcy Code provides further that the debtor must meet with the creditor's committee to transact such business as may be necessary and proper, and that the debtor shall furnish to the committee, upon request, information concerning the debtor's business and its administration. If in the performance of its duties, the committee would be aided by the services of an attorney, accountant or other professional, the Code provides a means for the appointment of such individuals as may be selected by the committee. The compensation of such individuals will be paid from assets of the debtor's estate, and will not be chargeable directly to individual committee members.
The Office of the United States Trustee will appoint committee members. The committee ordinarily consists of those persons who hold the seven largest unsecured claims and who are willing to serve. Generally, at the first meeting of creditors the committee will:
1. Elect a chairman.
2. Discuss the status of the case, with and without the debtor present.
3. Consider whether and which of the committee's powers should be invoked.
4. Make plans for future meetings. Such meetings will not involve the Court and will be called at times and places convenient to committee members.
Creditors' committees are appointed by the United States Trustee at the initial meeting of creditors held in the bankruptcy case. Ordinarily the members will include a few of the largest unsecured creditors.
The official creditors' committee is an important player in the Chapter 11 bankruptcy process. The Committee functions as a watchdog over the debtor, negotiator with secured creditors and a major participant in the plan confirmation process. The Committee has the right to voice an opinion on any issue in a Chapter 11 case.
A committee may consult with the debtor and make recommendations concerning the debtor's business but generally does not try to control the debtor's operations.
The Committee is entitled to hire counsel and any other professionals it deems appropriate. All professionals must be approved by the bankruptcy court, and, once approved; their fees are paid by the debtor from its assets. The ability to hire counsel whose fees are paid by the debtor is a great advantage to the Committee. It ensures proper representation of the creditors and often promotes cooperation by the debtor.
It is wise at the outset of a Chapter 11 case for the Committee to arrange a consultation with a lawyer who has significant experience in representing creditors' committees to get his or her recommendations regarding what course of action the committee should take and what assistance counsel may offer.
Tuesday, March 3, 2009
Published: March 3, 2009
A Plainview businessman caught in the alleged Agape World fraud has filed a $31 million lawsuit against the company and its owner Nicholas Cosmo.
Richard Mittasch, a licensed securities dealer, claimed he invested about $6 million of his clients’ money with Agape since March 2007, and about $100,000 of his own.
The suit, filed Feb. 26 by Manhattan attorney Marc LoPresti, accuses Cosmo and his purported bridge loan investment firm of racketeering and securities fraud, and asks the court for recovery of the lost funds as well as $25 million in punitive damages.
Cosmo was arrested on Jan. 26 for allegedly scamming investors out of $370 million in an alleged Ponzi scheme. This is not the first lawsuit filed against Cosmo, and more are expected.
Mittasch manages a small hedge fund company called Triton Capital Partners, which advertises a higher-than-usual payoff in a short amount of time. On the company’s Web site, it warns that “… investors in a hedge fund accept risk in exchange for their access to higher-than-average rates of return.”
Mittasch said he was introduced to Agape by Marty Hartmann, a sub-broker of Jason Keryc, one of Cosmo’s brokers. Mittasch said he last met with Hartmann in late December to give him more money to invest.
An investment adviser for 10 years, Mittasch said the hardest thing has been telling more than two dozen clients, some as far flung as Canada and South America, that their money might be gone with everybody else’s in Cosmo’s alleged swindle.
“Those are tough phone calls,” Mittasch said.
Note from Dom:
I'm going to try and post the "complaint" on the yahoo group site. Look for it at
Monday, March 2, 2009
For example, in a number of cases, persons transporting packages containing illegal drugs have asserted that they never asked what the contents of the packages were, and therefore lacked the requisite intent to break the law. Such defenses have not succeeded, as courts have been quick to determine that the defendant should have known what was in the package, and exercised criminal recklessness by failing to find out before delivering it.
A famous example of such a defense being denied occurred in In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003), in which the defendants argued that their file-swapping technology was designed in such a way that they had no way of monitoring the content of swapped files, and suggested that their inability to monitor the activities of users meant that they could not be contributing to copyright infringement by the users.
The court held that this was willful blindness on the defendant's part, and would not constitute a defense to a claim of contributory infringement.
My personal opinion (I am not a lawyer and am not giving legal advice)...
High Level Brokers (not the subs)involved with Agape and receiving commissions over and above the high interested returned to investors on money that was allegedly invested with a private bridge lender - as well as bankers that allowed the deposits of said funds and disbursements thereof, ... knowing that there being no logical explanation as to how that lender is generating those ridiculously high returns, should be considered criminally negligent. or at least partially responsible and subject to complete surrender of any assets or gains.
- ► 2010 (11)
- 3/28/09 meeting ...
- LIBN article on class action...
- CLASS ACTION BEGINS. READ THE DOC...
- Link to "Audio tape of Cosmo denying ponzi"...
- Trustees website is now operational.
- JUDGE FREEZES ASSETS
- MEETING THIS SATURDAY 3/28/09 - 9:30 am
- Do your part. Write to President Obama -see link
- From Jake Zamanskys Blogsite... thanks
- Trying to arrange a meeting for 3/28/09
- We’re angry, anxious, disappointed and concerned
- Help from the IRS...
- Thursdays court appearance by trustee
- I know its not much, but...
- The Sports Complex
- meeting at the sports facility today 1pm...3/14/09...
- Summary of the 3/13/09 Trustee Hearing
- Todays hearing at Bankruptcy court 03/12/09
- bankruptcy hearing today - 2 pm
- Its time to be heard...
- 3/10/08 ...Yesterdays meeting with Law Firms
- Senator Schumer wants answers.
- Agape got two government loans, not one!
- Dunn & Bradstreet under the gun...
- Serafino, Lucchetto Sued by New Jersey in Alleged ...
- Guide to Mezzanine LendersTurn to mezzanine lender...
- We are not alone...
- Knowledge is "POWER"
- Feds want to seize two LI homes owned by Cosmo dep...
- Fact or Fiction...
- Agape Victims Yahoo Group Web address:
- Tax Relief - Facts, Fiction and Future
- Did Cosmo have an "ownership interest in ProMAC"?
- SCHUMER, CANTWELL, MENENDEZ CALL FOR FIRST CONGRES...
- more on "creditors' committee"
- THE BENEFITS OF JOINING A CREDITORS COMMITTEE
- Another Law Suit begins...
- Broker / Bankers... "Wilfull Blindness or Ingnoran...
- Auction - Anyone want a mercedes ?
- Auction dates set for Agape Furnishings and Vehicl...
- Trustee Questionarre "posted to yahoo group site"
- ▼ March (43)