The owner of Agape World has been charged with running a $370m fraud scheme

Nicholas Cosmo, the owner and president of Agape World has been arrested for allegedly operating a $370m Ponzi scheme.

Federal agents executed search warrants at the Agape and AMA offices located in Hauppauge, Maspeth, and Jackson Heights, New York, and the government has moved to freeze bank accounts related to Agape and Cosmo. The US government has also seized $1.5m.

According to the complaint the defendant carried out a scheme in which he told investors they would receive substantial returns ranging as high as 48% to 80% per year with 99% security. In fact, most of the money invested was allegedly used to pay prior investors.

Between January 2006 and November 2008, more than $370m was deposited into Agape and AMA bank accounts. The vast majority of this was provided by more than 1,500 investors. In January 22, 2009, there was approximately $746,000 remaining in the Agape and AMA bank accounts, said the prosecution.

By paying investors partial returns and representing them as profits Cosmo persuaded investors to put in more sums.

FBI Assistant Director-in-Charge Demarest said: ‘Cosmo not only understated the risk, he completely misrepresented the underlying investments. When you lie about what you’re selling people, that’s fraud.’