The Securities and Exchange Commission has charged 14 people with violating federal securities laws for their roles in a $415 million Ponzi scheme, the agency announced Tuesday.
Sales agents allegedly pocketed more than $52 million selling nonexistent investments offered by Agape World Inc.
The SEC says the agents promised investors huge returns on their money, which they said would be used to provide bridge loans to businesses or commercial borrowers. Instead, regulators say investors were pouring their money into a Ponzi scheme that used little or none of the money for that purpose and went instead to agents or to pay off earlier investors in the scheme.
None of the sales agents were registered with the SEC to sell securities. Agape was also not registered with the SEC.
"This Ponzi scheme spread like wildfire through Long Island's middle-class communities because this small group of individuals blindly promoted these offerings as particularly safe and profitable," Andrew Calamari, acting regional director for the SEC's New York office said in a statement.
This is not the first time Agape has made headlines. The SEC says more than 5,000 investors nationwide were impacted by the scheme, which lasted from 2005 to 2009 when its leader, Nicholas Cosmo, was arrested. Cosmo, who has been called a "mini-Madoff", pleaded guilty to mail and wire fraud. He was sentenced to 300 months in prison and ordered to pay more than $179 million in restitution.
The SEC says the agents disregarded the risks of the investments and warnings about Agape's dire financial condition. The agency filed its complaint in the U.S. District Court in the Eastern district of New York and is seeking a jury trial.
The SEC says the following people were charged:
-Bryan Arias and Hugo A. Arias of Maspeth, N.Y., for receiving more than $9.5 million.
-Anthony C. Ciccone of Locust Valley, N.Y., and Salvatore Ciccone of Maspeth, N.Y., for receiving more than $17 million.
-Jason A. Keryc of Wantagh, N.Y., and Michael D. Keryc of Baldwin, N.Y, for receiving at least $16 million and $1 million, respectively.
-Marin C. Hartmann III of Massapequa, N.Y., and Laura Ann Tordy of Wantagh, N.Y., for receiving more than $3.5 million.
-Christopher E. Curran of Amityville, N.Y., for receiving at least $531, 890.
-Ryan K. Dunaske of Ronkonkoma, N.Y., for receiving more than $700,000.
-Michael P. Dunne of Massapequa, N.Y., for receiving more than $1.5 million.
-Diane Kaylor of Bethpage, N.Y., for receiving at least $3.7 million.
-Anthony Massaro of Boynton Beach, Fla., for receiving more than $5.9 million.
-Ronald R. Roaldsen Jr. of Wantagh, N.Y., for receiving more than $600,000.