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Complaint against 4 Agape World brokers

Complaint against 4 Agape World brokers

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Compliant filed against four brokers in the Agape World Ponzi scheme run by Nick Cosmo.
Compliant filed against four brokers in the Agape World Ponzi scheme run by Nick Cosmo.

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Published by: Long Island Business News on Apr 25, 2012
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51. According to investors interviewed in connection

with this investigation and records obtained during this

investigation, in or about October 20071 the defendants JASON

KERYCI ANTHONY MASSARO, ANTHONY CICCONE and DIANE KAYLOR,and

others working at their direction, contacted them about investing

in a bridge loan known as Clemson Grande (the "Clemson Grande

Loan"). According to investors and Agape contracts that the

defendants, and others working at their direction, sent to

investors in connection with the Clemson Grande Loanl the

defendants told investors that the term of the loan was

38

approximately 70 days and promised that Agape would' pay

approximately 14% interest for those 70 days, which equates to an

annual interest rate of approximately 73%. As with the bridge

lo~ns described above, the defendants assured investors that

there was little risk that they would lose money on this

investment. Indeed, they told investors that there was only a 1%

risk of loss of their investment. As a result, investors gave

Agape approximately $68.3 million for the Clemson Grande Loan.22

A review of records obtained during this investigation revealed

that KERYC, MASSARO, CICCONE and KAYLOR, and others working at

their direction, raised approximately $24.5 million, $9.4

million, $14.5 million and $2.5 million, respectively, for the

Clemson Grande Loan.

52. A review of the binder containing the loan

documents for the Clemson Grande Loan revealed that the amount of

the loan was approximately $5.6 million. This information was

also prominently displayed on the spine of the binder. In

addition to having access to the binder containing the actual

terms of the Clemson Grande Loan, the defendant JASON KERYC knew

the actual terms of the loan because, according to an interview

of Sub-broker 1/ Sub-broker 1 reviewed that binder and informed

KERYC that the Clemson Grande Loan was for approximately $5

22

This figure represents the total amount of money raised
by Agape for the Clemson Grande Loan, which includes what the
defendants raised as well as what other Agape account
representatives raised.

39

~~

million, not $20 million like KERYC told him and ihvestors. On a

subsequent visit to the Agape Hauppauge Office, Sub-broker 1

noticed that the aforementioned binders, which had previously

been openly displayed, were no longer conspicuously displayed.

53. A review of Agape bank records revealed that, on

or about October 12, 2007, Agape sent a wire transfer in the

amount of $4.2 million, which represented the principal. for the

Clemson Grande Loan. That amount was significantly less than

what the defendants JASON KERYC, ~~THONY MASSARO and ANTHONY

CICCONE, and others working at their direction, raised for that

loan. In fact, as set forth above, KERYC, MASSARO and CICCONE,

and others working at their direction, personally raised more

than the actual Clemson Grande Loan and the loan amount listed in

the Clemson Grande Loan binder. KERYC raised more than four

times the actual amount of the loan, MASSARO raised more than one

and a half times the actual amount of the loan, and CICCONE

raised two and a half times the actual amount of the loan.

Additionally, the actual interest rate for the Clemson Grande

Loan was 14% for one year, not 14% for 70 days (which would have

equaled 73% for one year). Accordingly, it would have been

impossible for Agape to pay investors 14% interest for a 70-day

investment with interest money derived from the Clemson Grande

Loan borrower. A review of Agape bank records indicated that the

money that Agape paid to individuals that invested in the Clemson

Grande Loan came from other Agape investors.

40

54. A review of the Agape bank records also indicated

that, at the purported conclusion of the Clemson Grande Loan,

investors received payments for purported returns on their

iqyestments and the defendants JASON KERYC, ANTHONY MASSARO,

ANTHONY CICCONE and DIANE lCAYLOR received commissions for that

loan, despite the fact that the Clemson Grande Loan was never

repaid. Indeed, I have examined Agape checks payable to

investors, KERYC, MASSARO, CICCONE and KAYLOR from Agape

containing the name Clemson Grande on the memo line of the check.

55. On October 31, 2008, the defendants JASON KERYC,

ANTHONY MASSARO, ANTHONY CICCONE and DIANE KAYLOR learned that

the Clemson Grande Loan had not been repaid, despite the fact

that they had been paid commissions and despite the fact that

investors had been paid interest and principal for that loan. In

fact, the defendants, and other Agape employees, received 'an

email from Cosmo informing them that the Clemson Grande Loan had

not been repaid and that the property may be foreclosed. By that

date, the Clemson Grande Loan should have been repaid almost a

year earlier--in December 2007. According to Agape bank records,

investors were paid returns on their investment in the Clemson

Grande Loan. In addition, the defendants were paid commissions

for raising money for this loan. None of the investors

interviewed in connection with this investigation were told that

the Clemson Grande Loan was not repaid. Instead of informing

41

';.'~'~';

their investors of this material fact, the defendants continued

to raise money from investors for Agape as set forth below.

56. None of the defendants JASON KERYC's, ~~THONY

~~SARO'S, ~~THONY CICCONE's and DIANE KAYLOR's investors that

have been interviewed in connection with this investigation were

told that Agape had raised more money than was needed for the

Clemson Grande Loan. Nor were they told that the money that they

invested in the Clemson Grande Loan was being used for any

purpose other than a bridge loan to Clemson Grande, or that the

Clemson Grande Loan had not been repaid. They also were not told

that the money returned to them was actually money that was

obtained from successive investors, rather than from the Clemson

Grande Loan.

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