Tuesday, March 17, 2009

Thursdays court appearance by trustee

Judge given details on the victims of alleged scheme
BY ROBERT E. KESSLER robert.kessler@newsday.com
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.

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