Wednesday, May 20, 2009

Bail increased

10:53 PM EDT, May 19, 2009

It will cost the accused mastermind of a $413-million Ponzi scheme another $500,000 to get out of jail.

A federal judge ruled Tuesday that Nicholas Cosmo, the former head of Agape World in Hauppauge, could be released on bail if he comes up with a bail package totaling $1.25 million, significantly more than the $750,000 bail set by a federal magistrate at the end of last month.

Rejecting an appeal by federal prosecutors that Cosmo was too much of a flight risk to be granted any bail, U.S. District Judge Denis Hurley in Central Islip nevertheless conceded that "in the right situation, the defendant will take advantage [to] extricate himself."

But Hurley said the new bail package would lead to the financial ruin of his nearest relatives if he fled. Cosmo's assets are frozen by the government. The bail is guaranteed by his parents and his sister and brother-in-law's assets, plus they'd be responsible for hundreds of thousands of dollars more if Cosmo fled, Hurley said.

Hurley ruled after a number of investors in Agape argued in court that Cosmo could not be trusted to be released on bail because of the callous way he looted them of tens and hundreds of thousands of dollars.

The new bail package should eliminate "the high probability that he will skip town" under less onerous conditions, Hurley said. Cosmo, 38, of Lake Grove, had been held in federal detention since he was arrested on fraud charges in January.

The judge "ruled bravely in accordance with the law," said Cosmo's attorney, Stacey Richman of the Bronx. "The purpose of bail is not to punish." Richman said his client's family would meet the bail conditions.

Federal prosecutor Grace Cucchissi said, "We respect the judge's decision. The overall package will give the defendant pause if he thought to flee."

Until Cosmo meets all the conditions the judge set, in addition to the increase in the bail amount, he will not be released. If he is released, he will go to his parents' home in Wantagh. Richman said the release might take several days.

The judge ruled that before Cosmo could be released he wanted an accounting of all the tangible assets supporting the package. This would require appraisals of the parents' and sister and brother-in-law's homes, and the freezing of the parents' money market fund, the mother's savings account and the brother-in-law's 401(k) pension.

The estimated total value of these funds and properties is several hundred thousand dollars less than $1.25 million, Hurley noted, but if Cosmo should flee, the government will go after the relatives for the total amount.

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