Tuesday, January 27, 2009

The Ponzi Report

Yet another alleged financial fraud was revealed yesterday when a New York financier, Nicholas Cosmo, head of the $300 million (well, maybe) Agape World investment fund, turned himself in to authorities to face charges.  Mr. Cosmo was MIA when the news of the alleged ponzi scheme hit the tape, leading authorities to wonder if he was hatching a complicated scheme to skip town.  For those of us who are amused by the ludicrous attempts of these financier clowns to evade authorities, Mr. Cosmo's uneventful surrender was a huge disappointment.  No melodramatic suicide note (ala Samuel Israel?)  Can't we at least get another fake mayday call and plane crash (like that boob Marcus Schrenker?)  

What I find most interesting about Mr. Cosmo is that he was convicted of a federal charge of felony fraud and swindle in 1999 and sentenced to 21 months in prison.  However, according to Agape's website, the firm was founded in 1999 in order to make commercial bridge loans, construction loans and the like.  Since Mr. Cosmo was not released from custody until August 2000, he was apparently structuring deals from prison while serving time for felony fraud charges.  Although potential investors had expressed their concerns, somehow this goon managed to raise $300 million from people who didn't seem to care that he was a convicted white collar criminal.  Or perhaps this was just a minor detail when weighed against guaranteed returns of 13% to 15%?  

No doubt many more of these money-making schemes that will be revealed as frauds soon enough.  Perhaps investors will perform more due diligence in the future before throwing their money at anything with purported double digit returns.  Until the next bubble, of course. 

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