Thursday, November 12, 2009

Santa Claus is coming to town .... "not".

Ponzi scheme victims to get checks soon

Nicholas Cosmo arrives at federal

Photo credit: Newsday File / Oct. 8, 2009 / James Carbone | Nicholas Cosmo arrives at federal court in Central Islip.

On one hand, Dom DiColandrea, one of the victims in the Ponzi scheme allegedly run by Nicholas Cosmo, is encouraged he's going to see a share of the money recovered by the court-appointed trustee of Cosmo's bankrupt company.

On the other hand, DiColandrea is a little discouraged the initial recovery is so small: less than a half-cent on the dollar.

About 800 victims of Cosmo's alleged $413-million Ponzi scheme should start receiving checks early next month, according to court filings made public by Silverman Acampora.

The Jericho law firm has recovered a little more than $5 million in assets held by Cosmo and his Hauppauge company, Agape World Inc. A little more than $400,000 already has been paid out pursuant to prior court orders.

A motion in U.S. Bankruptcy Court Friday in Central Islip asked for interim distribution of about $2.4 million. The court is expected to decide on the motion Dec. 1, attorney Ron Friedman of Silverman Acampora said Tuesday.

"That comes to about $800 on every $100,000 invested," said DiColandrea, 53, a West Babylon real estate appraiser who lost about $200,000 in the alleged scam. "I'll get a check for $1,600. That's not exactly what you'd hope to get back."

About 5,000 claims have been filed against Cosmo - who is in jail awaiting trial - and his company. Cosmo was arrested by federal authorities in January and charged with wire and mail fraud in the alleged Ponzi scheme.

A Central Islip federal judge last month ordered that Cosmo be sent back to jail to await trial after finding that the former Lake Grove resident had violated three conditions of bail. Cosmo had been in jail since his arrest until he posted $1.25 million bail in July.

Friedman said up to $1.4 million of the recovered funds could go toward professional fees and another $1 million could be held in reserve.riedman also said more litigation was ahead and more assets were out there. "It's hard to put a dollar amount on it because you don't know what the market will bring," he said.

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