JJD:CCC F.

#2011R00447 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK

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UNITED STATES OF AMERICA -

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TO BE FILED UNDER - against

SEAL

COMPLAINT AND AFFIDAVIT IN SUPPORT OF ARREST WARRANTS (T. 18, U.S.C.,
§

JASON KERYC! ANTHONY MASSARO! ANTHONY CICCONE and DIANE KAYLOR! Defendants. --X EASTERN DISTRICT RICHARD OF NEW YORK, SS.: CINNAMO,

1349)

being duly sworn! deposes with the United

and says

that he is a Postal Inspector Inspection Service

States Postal to law and

("USPIS") duly appointed

according

acting as such. Upon information October 2003 and January within and belief, in or about anq between and

2009, both dates being approximate

inclusive!

the Eastern District

of New York and elsewhere, ANTHONY and to CICCONE and

the defendants DIANE KAYLOR! intentionally defraud!

JASON KERYC, ANTHONY together conspire with others! to devise

MASSARO!

did knowingly

a scheme

and artifice

and to obtain money and property pretenses,

by means of materially and promises! placed and and

false and fraudulent for the purpose

representations

of executing

such scheme

and artifice,

caused to be placed

in post offices

and authorized

depositories

2

for mail mattersr be deposited private

matters

and thingsr and deposited

and caused by

to

matters

and things to be sent and delivered interstate carriers

and commercial containing 1341.

to wit: documents

and

envelopes

checks,

contrary

to Title 18, United

States

Coder Section

(Title 18, United

States Code, Section

1349) and grounds

The source of your deponent's for his belief are as follows:1 1. approximately investigations the United nine yearsr investigate I have been a Postal fourteen years of violations

information

Inspector

with the USPIS

for

and have participated of federal offenses

in numerous committed using

States mail and interstate I have been assigned fraud offenses,

carriers.

For the past

to units

that primarily

includingr

but not limited tOr mail securities and

fraud, wire fraud and violations commodities laws. I am currently

of the federal assigned

to the Hicksville

office of the USPIS. I. Introduction 2. Since August
2008r

I have participated, of Investigation Inc.

along
r

with agents of the Federal Bureau in an ongoing Merchant investigation LLC.
("AMArr)

(the "FBI")

of Agape World,

("Agape"), Agape with

Advance,

and individuals

associated

Because the purpose of this affidavit is to state only probable cause to arrest, I have not described all the relevant facts and circumstances of which I am aware.

3

Agape and AMA. court-authorized seized computers

On January

26, 2009, federal

agents executed and

search warrants and voluminous

at Agape and AMA's offices documents.

On June 16, 2009, of more email

federal agents executed than 30 email accounts accounts ANTHONY relating

court-authorized

search warrants

of former Agape employees,

including

used by the defendants

JASON KERYC, F~THONY and seized numerous during the

MASSARO, emails

CICCONE and DIANE KAYLOR, to Agape and AMA.

Additionally, obtained

investigation,

federal agents pursuant

bank records Further,

and other

Agape documents, investigators interviewed

to subpoenas.

other

assigned

to the USPIS and FBI and I have 80 individuals who invested money in

approximately

Agape and AMA. employees.

We also interviewed

numerous

former Agape and AMA is based

The information

contained

in this affidavit observations,

on, among other things, my own personal of documents, participation conversations of witnesses. 3. defendants To date, the investigation MASSARO, including

my review

emailsto/fromthedefendants.my of consensually made recordings, and interviews

in and review

with other law enforcement

officers

has revealed ANTHONY

that the and

JASON KERYC, ANTHONY

CICCONE

DIANE KAYLOR, engaged

together with others, activity

knowingly

and intentionally

in fraudulent

involving

the use of the United Specifically, the

States mail and private

interstate

carriers.

4

investigation manner

has revealed

that Agape

and AMA werE~':operated in a referred to, as a "Ponzi

consistent

with what is commonly

scheme." investors promises

A Ponzi scheme is a fraudulent are lured to invest money of unusually high returns

scheme in which venture from the to with

in a business and/or profits

investment. investors However, returned directly venture

The high returns

and/or profits

are represented

to be generated

by the business

ventures

themselves.

in a Ponzi scheme, to investors

the vast majority

of the money

is actually

money that was obtained rather than from the business becomes promised to current from new the

from successive itself.

investors,

The Ponzi scheme

ultimately

unsustainable investors investors. promised

as the returns

and/or profits

grow to exceed the amount Early investors

of money obtained

in a Ponzi scheme often receive a return of their initial of the investments investors

profits

and, sometimes, success

investment.

The apparent

is later and to

used to encourage

re-investment

by original

recruit new investors.

New' investors

typically

make no profits when the

and, in fact, lose their entire scheme ultimately 4. ANTHONY collapses.

original

investment

The defendants

JASON KERYC, ANTHONY together

MASSARO, knowingly

CICCONE and DIANE KAYLOR,

with others,

and intentionally investors

engaged in a scheme

to defraud

individual

by means of materially specifically

false and fraudulent telling investors, among

representations,

by falsely

5

other things,

that:

(1) Agape provided borrowers

secured

short-term

, ..

,

bridge

loans to commercial returns; brjdge (2) Agape

that generated

high interest

investor money would be used solely to fund on Agapets investorst money

loansj

(3) returns/profits

would be derived borrowers; During and

solely from interest paid by Agapets

commercial

(4) the bridge

loans were a low risk venture. we determined that Agape

the course of the investigation,

investor money was not used solely to fund bridge little of the investors' commercial million borrowers money was actually Insteadt

loans and that to $100

forwarded

as loans.

approximately

of the investorst commodities
I

money was invested investments,

in high risk, without the

unsecured investors defendants

and futures and contrary
I

knowledge

to representations KAYLOR

made by the

KERYC, MASSARO
I

CICCONE,

and others.

Furthermore

the investigation

revealed

that almost all of the money provided payments by to

money paid back to investors subsequent investors, rather

was actually than interest borrowers.

provided

Agape and AMA by commercial belowt in several cases
l

In fact, as set forth loans were never madet or

the purported

the loans that were made were never repaid. 5. records As discussed that
l

belowt

a review

of Agape and ANA
2009
t

indicated

between

October

2003 and January

more than 5/000 and AMA. sustained

individuals

invested

over $400 million approximately

in Agape

Of those 5,000 investorst actual losses totaling

4,100 investors

approximately

$179 million.

6

Despite MASSARO,

representations ANTHONY

that the defendants DIANE KAYLOR,

JASON '''RERYC, ANTHONY at

CICCONE,

and others working $30

their direction, million merchant II.

made to investors,

only approximately

of the $400 million loans.

was actually

used to fund bridge

or

The Defendants
A. Agape

and the Companies

6. incorporated

Agape was a New York State corporation in August 2000. Agape maintained New York offices at 150

Motor Parkway, Hauppauge

Suite 106, Hauppauge,

(the "Agape New York and

Office"),

64-13B Grand Avenue,

Maspeth,

82-11 37th Avenue, (collectively, a provider

Suite 602, Jackson

Heights, Agape

New York

the "Agape Offices"). bridge

held itself out to be borrowers,

of short-term

loans for commercial high-interest

which loans purportedly investments. 7. from investors to commercial promotional

generated

returns on

Since approximately purportedly borrowers

2005, Agape obtained

money

for the purpose

of loaning that money loans. Agape In its stated:

in the form of bridge on its website,

material

displayed

Agape World Inc. is a private bridge lender since 1999. We do not provide residential mortgages . We have private sources of financing for bridge loans. Depending upon the borrower's time frame and the circumstances, interest-only loans as well as fixed-rate loans are available. Additionally, Agape World Inc. can provide

7

financing at the time of acquistion, or'\:}ears after an acquisition, in order to free trapped equity. These special situation loans can be placed instead of or alongside conventional financing to provide winning solutions where others may only see problems. Our firm can fund viable transactions of any size. A link on the Agape homepage labeled "Investor Information" led

to a page on which the following

statement

appeared:

As our business grows, Approved Investors are always welcome to be a part of our fund raising through our brokers. With our solid business infrastructure and highly accredited name, Agape World Inc. is foreseeing a bright future. Project developers and contractors have sealed our services thru 2008 and into the future. We are projecting even more opportunities for borrowers and investors alike. Agape World Inc. provides the bridge to your future! The website benefits limited also made certain claims regarding in Agape the rights and but not

to be enjoyed by investors to, the following:

including,

"(I) 99% security (2) Investors

of your investment are in complete and

by first position control

uee

filing,

of their funds and are able to access at any timet by 100% commercial bridge

(3) Each loan is collateralized As set forth belowt these representations 8. Chapter others

asset lien. ,t

for most of Agape's was false.

loans, each of

On or about February

5, 2009, an involuntary against Agape and

7 petition

was filed by four creditors

in the United States Bankruptcy of New York.

Court for the Eastern Inc., 09-BK-70660

District

See In re Agape World,

8

(E.D.N.Y.). that motion B.

On February and appointed

12/ 2009/ the bankruptcy a trustee to oversee

court granted

the bankruptcy.

AMA 9. ANA was a New York State limited incorporated in November liability

corporation

2007 that held itself out as credit cards. AMA obtained

a lender to businesses

that accepted

money from investors purportedly to businesses "merchant Merchant

for the purpose

of loaning money the

at high rates of interest

(hereinafter

loansll) through a company Advance Capital, LLC.

known as Professional ANA operated from were

("PROMAC'").

the Agape Offices. "typically sales." discussed

ANA's website

stated that such advances future credit card

taken out against

a merchant's

ANA was included above. 10. According

in the Agape bankruptcy

proceedings

to records

obtained

during this MASSARO, raised

investigation, ANTHONY

the defendants

JASON KERYC, ANTHONY

CICCONE and DIANE ICAYLOR, together $50 million to fund merchant

with others, loans.

approximately

Based on Agape

bank records/ between November only approximately $5 million

2007 and January to PROMAC

2009, AMA loaned loans,

to fund merchant $50 million

even though ANA had received investors to fund merchant majority

approximately

from that

loans.

The records

also revealed

the overwhelming investors

of the money paid by AMA to their investments by original

was generated

from successive

9

investors repayment C.

and new investments or interest PPP 11. The Premium payments

by new investors,

and· not from loan

made to AMA by their. borrowers.

Protection

Plan, LLC. 2008.

("PPP") was a PPP offered to insure their

Delaware insurance principal

company

incorporated to Agape

in October

policies

investors

purporting

and a portion

of their expected

interest.

The policies in the ("Cosmo")

were supposed

to insure the timely payment

of principal Cosmo

case of a default by an Agape borrower. was the President D. and a 51% shareholder Nicholas Cosmo

Nicholas of PPP.

Co-conspirator 12.

Co-conspirator

Nicholas

Cosmo was Agape's of AMA and a Cosmo

President

and owner.

Cosmo was also the President

20% shareholder was convicted

in PROMAC.

Prior to forming Agape and AMA,

o"fmail fraud in the Eastern District

of New York (ADS). in a

in the case of United States v. Nicholas Between January 1999 and August for that offense.

Cosmo, 98-CR-089

2000, Cosmo was incarcerated In early August

federal prison entitled

2008, a website

www.fatwallet.com of a crime.

disclosed On April

that Cosmo had previously 23, 2009, following an

been convicted investigation

into the Ponzi scheme described returned

in this Affidavit, in United

a grand jury in this district States v. Nicholas twenty-two violation Cosmo,

an indictment

09-CR-255

(DRH) charging

Cosmo with in

counts of mail fraud and ten counts of wire fraud, of Title 18, United States Code, Sections 1341 and

10 1343, respectively. On October 29, 2010, Cosmo pled guilty to

one count of mail fraud and one count of wire fraud. 14, 2011, Cosmo was sentenced yee.r s . 13. MASSARO, Each of the defendants CICCONE

On October of 25

to a term of imprisonment

JASON KERYC, ANTHONY

ANTHONY

and DIANE KAYLOR, who worked as account for Agape and AMA, reported directly and

representatives to Cosmo.

or brokers

According

to interviews

of former Agape employees

a review of records obtained investigation, accounts, including

during the course of this email

a review of the defendants' had regular

the defendants

contact with Cosmo during Cosmo and

the conspiracy. the defendants money. E.

Additionally,

on several occasions,

met with investors

to discuss Agape and solicit

Defendant 14.

JASON KERYC approximately November 2003 and January representative during this employees, as an for

Between

2009, the defendant Agape.
2

JASON KERYC was an account obtained

Based on a review of records and interviews KERYC

investigation account

of former Agape identified in specific

representative, investors

potential bridge

investors,

solicited merchant

to invest

loans and maintained

loans, maintained

contact with investors,

Account representatives at Agape were also referred to as brokers. Account representatives solicited investments for both Agape and AMA.

2

11
';.~

client bridge maintained

loan contracts, records

received money from investors

~

and

account

for each of his investors.

KERYC also Of the

hired sub-brokers approximately approximately working

to assist him with those duties.3 who invested

5,000 individuals

in Agape and AMA,

1,600 of them invested

with KERYC or sub-brokers obtained during the working at

at his direction.

Based on records

course of this investigation, his direction, from investors bridge loans.4 solicited

KERYC, and sub-brokers approximately

and obtained

$699 million

that was supposed KERYC also raised loans. According

to be used to invest in specific approximately $10.5 million KERYC for

AMA's merchant

to Agape bank records,

Sub-brokers performed similar tasks to the account representatives, but instead of reporting to Cosmo and being paid by Cosmo, they reported to, and were paid by, their account representative. A sub-broker's responsibilities included identifying potential investors, soliciting investors to invest in specific bridge loans and merchant loans and maintaining contact with investors, all on behalf of the account representative for whom they worked. 4 This dollar figure includes both "new money" and money that was rolled over from prior investments. The term "new money" means money raised from new investors and additional money raised from' prior investors. The total amount of cash (or new money) that was raised by Agape purportedly for its bridge loans was approximately $363 million. The reason for the difference between the $699 million raised by KERYC and $363 million raised by the entire company is because the $699 million is not limited to new money--it includes money that KERYC convinced investors to rollover from one bridge loan investment to the next bridge loan investment. This is the dollar amount upon which KERYC's commission was calculated.

3

12 received approximately efforts.s Based on an email recovered the defendant during this $16 million In commission for his and his
.....

~~

sub-brokers' 15. inyestigation, criminal

JASON KERYC was aware of Cosmo's 13, 2008. The about in

history

no later than February

investigation

has revealed

that KERYC lied to an investor to an investor interviewed

Cosmo's background. connection

According

with this investigation

("Investor 1"), whose identity

is known to the government, Cosmo was an attorney

in or about 2006, KERYC told him that

and that Cosmo had three or four partners Cosmo was not an attorney and

In Agape who were also attorneys. he did not have any partners, who were attorneys. F. Defendant 16. the defendant Agape. ANTHONY MASSARO

let alone three or four partners

Between approximately ANTHONY MASSARO

April

2004 and January representative during this

2009, for

was an account obtained

Based on a review of records and interviews

investigation

of former Agape employees, identified potential bridge

as an

account representative, solicited merchant investors

MASSARO

investors,

to invest in specific contact

loans and maintained and

loans, maintained

with investors,

client bridge
5

loan contracts,

received

money from investors

This dollar figure is the total amount of commission that KERYC received and does not take into account the fact that KERYC had to pay sub-brokers working at his direction out of these funds.

13

maintained

account records

for each of his invest~~s.

MASSARO Of the

also hired sub-brokers approximately

to assist him with those duties. who invested

5!000 individuals

in Agape and AMA, or sub-brokers obtained during

ap'vroximately 820 of them invested working at his direction. MASSARO

with MASS~~O to records

According
1

this investigation! direction! solicited

and sub-brokers

working

at his

and obtained

approximately

$188.8 million

from investors bridge
AMA/s

that was supposed He also raised loans.

to be used to invest in specific $2.5 million for

loans.6 merchant

approximately

Based on Agape bank records! $6.5 million in commission

MASSARO

received

approximately efforts.7

for his and his

sub-brokers! 17. the defendant

Before he worked ANTHONY MASSARO

at Agape!

on November of heroin

24, 1997, importation District of

was convicted

in the United States District Florida. On March
41

Court for the Southern

1998, he was sentenced

to 57 months' release. was

imprisonment According

to be followed

by three years of supervised of Prisons records
1

to United States Bureau at Allenwood Federal

MASSARO

incarcerated April

Correctional

Institution

from

1998 to June 2001.

From January

1999 to August

2000, Cosmo

6 As described in footnote 41 this dollar figure includes both new money and money that was rolled over from prior investments. 7 This dollar figure is the total amount of commission that MASSARO received and does not take into account the fact that MASSARO had to pay sub-brokers working at his direction out of these funds.

14 was incarcerated interviewed at that same facility. According to an investor ("Investor 2"), or

in connection

with this investigation

whose identity De~ember

is known to the government,

in November

2008, MASSARO

told him that he did not know whether That was a lie because criminal history
I

Cosmo had ever been in prison. August
2008
1

in early

shortly after Cosmols

was disclosed

on www.fatwallet.com. MASSARO
I

Cosmo told Agape employees V~SSARO

including

that he had been in prison.

further told

Investor trainer. G.

2 that he met Cosmo when he became

Cosmols personal

Defendant 18.

ANTHONY

CICCONE January 2005 and January

Between approximately CICCONE

2009

1

the defendant ANTHONY

was an account representative obtained during this as an
I

for Agape.

Based on a review and interviews

of records

investigation account

of former Agape employees, identified potential bridge

representative, investors

CICCONE

investors

solicited merchant

to invest

in specific

loans and
I

loans, maintained

contact

with investors money

maintained and

client bridge maintained

loan contracts,

received

from investors

account records

for each of his investors.

CICCONE Of the

also hired sub-brokers approximately approximately working
5/000

to assist him with those duties. who invested

individuals

in Agape and ~~,

530 of them invested

with CICCONE or sub-brokers obtained during the working at

at his direction.

Based on records CICCONE,

course of this investigation,

and sub-brokers

15 his direction, million solicited and obtained approximately $319.7

from investors loans.B

that was supposed

to be used to invest in $4 million

specific bridge

He also raised approximately According

fQ~ AMA's merchant CICCONE received

loans.

to Agape bank records, in commission for

approximately

$10.7 million

his and his sub-brokers' after Cosmo's

efforts.s

In early August on

2008, shortly

criminal history

was disclosed

www.fatwallet.com.

Cosmo told Agape employees,

including

CICCONE,

about his criminal past. H. Defendant 19. the defendant Agape. DIANE KAYLOR approximately March 2006 and January representative during this as an for 2009,

Between

DIANE KAYLOR was an account

Based on a review of records and interviews

obtained

investigation account

of former Agape employees, identified potential bridge

representative, investors

KAYLOR

investors,

solicited merchant

to invest in specific

loans and maintained and

loans, maintained

contact with investors, received

client bridge maintained

loan contracts,

money from investors

account records

for each of her investors.

KAYLOR Of the

also hired sub-brokers

to assist her with those duties.

8 As described in footnote 4, this dollar figure includes both new money and money that was rolled over from prior investments. 9 This dollar figure is the total amount of commission that CICCONE received and does not take into account the fact that CICCONE had to pay sub-brokers working at his direction out of these funds.

16

approximately approximately working

5,000 individuals
245 of them

who invested

in Ag~pe

and AMA,

invested

with KAYLOR or sub-brokers obtained during the at

at her direction.

Based on records KAYLOR,

course of this investigation, her direction, from investors bridge loans.1o loans. solicited

and sub-brokers approximately

working

and obtained

$59.7 million

that was supposed

to be used to invest in specific $551,000 for AMA's

She also raised approximately In approximately for Agape,
$4.75

merchant

April KAYLOR

2010, during the admitted that she for her (E.D.N.Y.). the from at KAYLOR bank

bankruptcy received efforts.

proceedings

approximately See Silverman 20.

million

in commission Corp.,

v. Brandino

09-BK-8207

Prior to being an account

representative, for Agape

defendant

DIANE KAYLOR worked

as a bookkeeper 2007.11

least January 2006 to September performed records. period administrative
An examination

In that capacity,

tasks and had access to Agape's of the bank records

from that time

revealed

that the vast majority not from bridge

of money coming into Agape In of dollars

came from investors, addition,

loan borrowers. sent millions

those records trading

show that Agape

to a commodities government.

firm, whose identity

is known to the

As described in footnote 4, this dollar figure includes both new money and money that was rolled over from prior investments. 11 Between approximately March 2006 and September 2007 KAYLOR worked as both a bookkeeper and an account representative.
]0
1

17 21. criminal In early August was disclosed including On January 2008, shortly after Cosmo's Cosmo told about his an

history

on www.fatwallet.com.

Agape employees, crLmi.naI past. investor

the defendant

DIANE KAYLOR,

26, 2009, after Agape collapsed,

asked KAYLOR

"please don't tell me that I lost every Why wasn't anyone in prison in '99 for

friggen dollar I have!!!!!! !What is going on? informed FRAUD!!" that this man spent 21 months In response, KAYLOR wrote

"I just learned not that long

ago about his jail time or I would have never taken this job." Two days later, KAYLOR repeated different I. investor. Agape and AMA's Bank Accounts 22. thirteen Based on my review of bank records were opened in this caser in that in another email to a

separate bank accounts

at Bank of America

the name of Agape and another at Bank of America One of the thirteen been identified remaining accounts.

thirteen

bank accounts

were opened

in the name of AMA accounts

(the "Agape BOA Accounts")

in the name of Agape has clearly account while the

as the Agape operating

twelve accounts SimilarlYr

can be described

as subsidiary accounts in the name of account as

one of the thirteen

AMA has clearly been identified while the remaining subsidiary accounts.

as the AMA operating can be described

twelve accounts

18
J.

The Commodities Futures 23.

Trading Accounts .. October 2003 and October

';'-;

-'~

In or about and between trading accounts

2008, Cosmo maintained co~modities Illinois

with seven different in Chicago, are known to records

and futures trading
l1 ),

firms located

(the "Trading Accounts

whose identities

the government. indicated executed, According

A review of Agape bank and trading accounts were funded,

that the trading

and trades were

using money obtained

from Agape and AMA investors. records
I

to Agape bank and trading

from October

2003 from

through October

2008, more than $100 million

was transferred

Agape and AMA to the Trading Accounts. of that $100 million was subsequently trading, ~~. with approximately

Approximately

$80 million

lost in commodities returned to Agape and ANTHONY

$20 million
1

The defendants

JASON KERYC

ANTHONY

MASSARO,

CICCONE

and DIANE KAYLOR did not tell any of the investors in connection with this investigation trading. that their

interviewed

money would be used for commodities Agape during or AMA's promotional this investigation materials disclose

Nor did any of

that have been obtained
I

that investors

money would be

used for commodities III.

trading.

Scheme to Defraud A. Overview 24. In or about and between October 2003 and January
I

2009, the defendants

JASON KERYC, ANTHONY

MASSARO

ANTHONY

19 CICCONE and DIANE KAYLOR, without limitation, together with others, including,

Cosmo, executed

a scheme to fraudulently It was a part of at

induce investors

to invest in Agape and AMA.

ttl? scheme to defraud that the defendants, their direction, investment clients investors told investors

and others working

that Agape would use their bridge loans to commercial they told bridge

capital

to fund specific

(the "bridge loan clients"). that their money was needed

Although

to fund specific

loans, the defendants, solicited investments

and others working

at their direction, to fund

well in excess of what was needed

the specific

loans, and thus, knew that investors' other than to fund specific

money was bridge 'loans. and

being used for purposes

It was a further part of the scheme others working at their direction, exceeded

that the defendants, promised investors

rates of

return that significantly charged its bridge

the interest

rates Agape the interest the Agape

loan clients

and that therefore,

on the loans made by Agape investors investors with the promised

could not possibly returns.

provide

In order to induce and to conceal the promised the

to invest and continue

investing,

fact that the Agape loans were not generating returns, Cosmo and the defendants investors

used the excess money raised to previous investors.

from subsequent Additionally,

to pay returns

in some cases, the defendants that Agape was providing

falsely overstated on certain

the loan amounts

to borrowers

20
~..

bridge

loans.

Further

t

the defendants

did not inform investors or on extension. that the defendants and DIANE KAYLORt to fund

that certain bridge 25. JASON KERYC ~ together specific between
t

loans were in default

It was a part of the scheme ANTHONY MASSAROt ANTHONY

CICCONE

with others, raised approximately bridge October loans.

$363 million

Based on a review of Agape bank records, 2009, Agape loaned only even though to

2003 and January

approximately

$25 million

to its bridge

loan clients,

Agape had received

approximately loans.

$363 million

from investors

fund specific bridge overwhelming investors majority

The records

also revealed

that the

of the money paid by Agape to their in reality, was generated and new or

as returns on investment, investments

from successive investments

by original

investors

by new investors,

and not from loan repayment

interest payments 26. beginning MASSARO,

made to Agape by their borrowers.

It was a further part of the scheme that, 2008, the defendants JASON KERYC, ANTHONY and others working the PPP that of at

in October ANTHONY

CICCONE and DIANE KAYLOR, induced Agape The defendants investors falsely

their directiont insurance investors plan.

to purchase represented

who purchased

the insurance secured

plan would own a portion of the bridge

the liens that purportedly The defendants further

repayment

loans.

falsely represented

that the PPP insurance starting bridge in October loans

plan would be available

for all new contracts

2008 and that it was available

for five existing

21 extended to purported borrowers. In fact, the five' bridge
~~

loans

purportedly Accordingly,

covered by the PPP were never actually made by Agape. no liens secured the repayment of those fictitious the loss of their

lQ~ns and investors money. 27.

were not insured against

According

to investors

interviewed

in connection

with this investigation investigation ANTHONY
l

and records obtained

during the MASSARO,
I

the defendants

JASON KERYC, ANTHONY together

CICCONE and DIANE KAYLOR, without limitation,

with others

including, materially herein,

Cosmo, made and caused to be made, representations, as described for Agape and

false and fraudulent

in correspondence

and promotional

materials

AMA, which were sent to potential According to investors interviewed obtained

investors

via the U.S. Mail. with this on

in connection during CICCONE

investigation

and records

the investigation, and KAYLOR, the bridge

several occasions, with others, investments

KERYC, MASSARO,

together

sent contracts

memorializing

loan

via the U.S. Mail.

Additionally, together

it was a part of

the scheme that the defendants, investors

with others, directed

to mail checks to the Agape Offices via the U.S. Mail. 28.
An examination

of the Agape bridge loans, illustrates ANTHONY

loans, or in that the CICCONE and

several cases purported defendants

bridge

JASON KERYC, ANTHONY

MASSARO,

DIANE KAYLOR,

together with others,

repeatedly

lied to investors

about what their investments

would be used for, did not tell them

22 that Agape's exorbitant business model was incapable to investors of supp~{-ting the and failed to disclose or on extension.

returns promised

that certain bridge loans were in default Information below.12 B. Legacy Village
29.

regarding

eleven particular

loans is provided

Loan to investors and records interviewed in connection this JASON at loan

According

with this investigation investigation, KERYC, ANTHONY

obtained

during

in or about March

2006, the defendants

CICCONE and DIANE KAYLOR/ and others working contacted them about investing in a bridge

their direction,

known as Legacy Village to investors

(the "Legacy Village that KERYC/

Loan") .13 CICCONE

According

and Agape contracts

and KAYLOR, in told

and others working connection investors promised interest

at their direction,

sent to investors

with the Legacy Village

Loan, the defendants

that the term of the loan was approximately that Agape would pay investors approximately to an annual assured

42 days and 14% interest

for those 42 days, which equates
122%.14

rate of approximately
12

The defendants

investors

The investigation has revealed other bridge loans that are not detailed herein. [3 To date, I have not seen any records indicating that the defendant ANTHONY MASSARO raised money for the Legacy Village Loan. [4 A review of Agape contracts revealed that the defendants, and others working at their direction, routinely offered investors different rates of interest for the same contract depending on who the investor was and their relationship to the investor.

23 that there was little risk that they would lose mOney on this investment. Indeed, they told investors that there was only a 1% investors gave

risk of loss of their investment. Agj~l.pe approximately $5.9 million

As a result,

for the Legacy Village this investigation

Loan.15 revealed

A review of records obtained

during

that KERYC, CICCONE and KAYLOR, direction, $115,000, raised approximately respectively, 30. defendants

and others working $935,000,

at their and

$3.6 million Loan.16

for the Legacy Village

On March 3, 2006, Cosmo sent an email to the CICCONE, ANTHONY MASSARO and

JASON KERYC, ANTHONY informing

other Agape employees Legacy Village

them that the amount of the $900,000 and $1,000,000. only needed and others Despite

Loan was between Village

t.he fact that the Legacy

Loan borrower

between working amount.

$900,000

and $1 million,

KERYC and CICCONE,

at their direction,

personally

raised more than that

Indeed, as set forth above, $3.6 million

CICCONE and his sub-brokers

raised approximately

(three and a half times the

actual amount of the loan), while KERYC and his sub-brokers raised approximately employed
IS

$935,000.

As the defendants

knew, Agape

other brokers who were also raising money for this loan.

This figure represents the total amount of money raised by Agape for the Legacy Village Loan, which includes what the defendants raised as well as what other Agape account representatives raised. 16 When I list the money raised by the defendants or Agape, I am referring to both old and new money unless I specifically indicate otherwise. This is the dollar amount upon which the defendants' commissions were calculated.

24

Indeed, as discussed of approximately

above, Agape representatives

raised a total Loan.

$5.9 million

for the Legacy Village

Additionally·, in an email dated November a.epreadsheet approximately to CICCONE documenting $935,000

5, 2007, KERYC forwarded

that he had raised Loan. Accordingly,

for the Legacy Village lied to investors

KERYC and CICCONE knowingly

when they assured

them that their money would specifically Legacy Village Loan.

be used to fund only the indicated

A review of Agape bank records of the money raised

that the vast majority

for the Legacy Village trading.

Loan was used to pay other investors As set forth below, KERYC and CICCONE accept money from investors 31. for Agape

or for commodities continued and AMA. revealed

to solicit and

A review of Agape bank records

that Agape further

did not lend any money to Legacy Village. indicated that, at the purported received payments conclusion

Those records

of the Legacy Village returns on their CICCONE

Loan, investors investments received

for purported

and the defendants

JASON KERYC and ANTHONY

commissions

for that loan, despite Indeed,

the fact that the I have examined from Agape

Legacy Village

Loan was never made. to investors,

Agape checks payable containing

KERYC and CICCONE

the name Legacy Village 32.

on the memo line of the check. JASON KERYC's, ANTHONY

None of the defendants

CICCONE's

and DIANE KAYLOR's

investors. that have been interviewed were told that Agape had Loan.

in connection

with this investigation

raised more money than was needed

for the Legacy Village

25 Nor were they told that the money that they invested Legacy Village bridge Loan was being used for any purpose in the

other than a Loan

loan to Legacy Village,

or that the Legacy Village

wa§ never made.

They also were not told that the money returned money that was obtained from successive Loan.

to them was actually investors,

rather than from the Legacy Village Gala Resources 33. According Loan to investors and records

c.

interviewed

in connection

with this investigation investigation, KERYC, ANTHONY

obtained

during this JASON

in or about January CICCONE, ANTHONY

2007, the defendants

MASSARO

and DIANE KAYLOR, and them about investing

others working at their direction, in a bridge Loan").

contacted

loan known as Gala Resources to investors and Agape

(the "Gala Resources contracts that the sent to

According

defendants, investors defendants

and others working

at their direction,

in connection

with the Gala Resources

Loan, the

told investors

that the term of the loan was that Agape would pay investors to an

approximately approximately

56 days and promised 14% interest

for those 56 days, which equates 91%. The defendants

annual interest rate of approximately assured investors

that there was little risk that they would lose Indeed, they told investors that there

money on this investment.

was only a 1% risk of loss of their investment. investors gave Agape approximately $26.3 million

As a result, for the Gala

Resources

Loan. 17

A review of records obtained that KERYC, CICCONE!

during

.. ..

26

this

investigation

revealed

MASSARO

and KAYLOR, $7.3

and others working million,

at their direction, $1.1 million

raised approximately

$8.3 million,

and $1.1 million, Loan.

respectively, 34. defendants

for the Gala Resources On January

3! 2007, Cosmo sent an email to the CICCONE, ANTHONY MASSARO and

JASON KERYC, ANTHONY informing

other Agape employees Resources bridge

them that the amount of the Gala Despite the fact that the CICCONE personally at his

Loan was $8.2 million. only needed

loan borrower

$8.2 million,

raised more than that amount. direction, raised approximately

CICCONE,

and others working

$8.3 million

and, as CICCONE

knew, Agape employed for this loan.

other brokers

who were also raising money above, CICCONE knew that

Indeed, as discussed

KERYC raised approximately Loan because he received November knowingly

$7.3 million

for the Gala Resources in an email on Accordingly, CICCONE

KERYC's

spreadsheet this fact.

5, 2007 that documented lied to investors

when he assured

them that their money Loan.

would specifically

be used to fund only the Gala Resources indicated

A review of Agape bank records

that the vast majority Loan was used to pay As set forth below,

of the money raised for the Gala Resources other investors or for commodities trading.

17 This figure represents the total amount of money raised by Agape for the Gala Resources Loan! which includes what the defendants raised as well as what other Agape account representatives raised.

27 CICCONE Agape. 35. A review of Agape bank records revealed that Agape further continued to solicit and accept money frorriinvestors for

dig. not lend any money to Gala Resources. indicated that, at the purported received payments conclusion

Those records

of the Gala Resources returns on their and the I have

Loan, investors investments ANTHONY

for purported

and the defendants received

JASON KERYC/ ANTHONY

CICCONE

MASSARO

commissions

for that loan/ despite Indeed,

fact that the Gala Resources examined

Loan was never made.

checks payable to investors,

KERYC, MASSARO

and CICCONE

from Agape containing check. 36. MASSARO's,

the name Gala on the memo line of the

None of the defendants CICCONE's

JASON KERYC's,

ANTHONY that were

ANTHONY

and DIANE KAYLOR's

investors

have been interviewed

in connection

with this investigation than was needed

told that Agape had raised more money Gala Resources invested purpose Loan.

for the that they

Nor were they told that the money

in the Gala Resources other than a bridge

Loan was being used for any or that the

loan to Gala Resources/

Gala Resources money returned successive D.

Loan was never made. to them was actually rather

They were not told that the money that was obtained from

investors, United 37.

than from the Gala Resources

Loan.

Steel Loan to investors and records interviewed in connection this

According

with this investigation

obtained

during

28 investigation, ANTHONY working b~~dge in or about June 2007, the defendants ANTHONY CICCONE and DIANE KAYLOR, JASON KERYC,

MASSARO,

and others in a

at their direction, loan known as United to investors

contacted Steel

them about investing

(the "United Steel Loanli). contracts that the defendants, in

According

and Agape

and others working connection investors promised interest

at their directionr

sent to investors

with the United

Steel Loan, the defendants

told 70 days and

that the term of the loan was approximately that Agape would pay investors

approximately·14% to an annual interest loans described

for those 70 days, which equates 73%.

rate of approximately above, the defendants

As with the bridge investors

assured

that there was little Indeed, they

risk that they would lose money on this investment. told investors investment. $57.2 million obtained CICCONE

that there was only a 1% risk of loss of their investors gave Agape approximately A review of records that KERYC, MASSAROr raised

As a result,

for the United

Steel Loan.18 revealed

during this investigation

and KAYLOR, and others working $19.8 million,

at their direction, $15.7 million

approximately million,

$6.4 million,

and $2.9

respectively, 38.

for the United

Steel Loan. that detailed in

The investigation

has revealed

information

about the bridge

loan borrowers

was maintained

This figure represents the total amount of money raised by Agape for the United Steel Loan, which includes what the defendants raised as well as what other Agape account representatives raised.
18

29 binders that were kept in a main office area of th~ Agape Office
.l~

Hauppauge

These binders

contained

the actual

loan rate

terms, including

the total amount of the loan, the interest and the duration of a cooperating of the loan. witness, he/she MASSAROr

b~~ng paid by the borrower According observed ANTHONY to an interview

each of the defendants

JASON KERYC, ANTHONY

CICCONE and DIANE KAYLOR reviewing In addition

these binders

during

the conspiracy.2o within the binder,

to the information

contained indicated the

the spines of several binders

name of the borrower, of loan. Thereforer

the total amount of the loan and the date the defendants had access to complete

details of those loans and could determine those loans without 39. documents even opening

the dollar amount of

the binder. containing the loan

A review of the binder

for the United Steel Loan revealed $1.1 million.

that the amount of was

the loan was approximately also prominently to an interview ("Sub-broker l")r displayed

This information

on the spine of the binder. JASON KERYCrs

According

of one of defendant whose identity

sub-brokers in

is known to the governmentr

the summer of 2007,

KERYC told Sub-broker

1 that he had reviewed

These binders were later moved to the office of the Even loan underwriter, which was in the Agape Hauppauge Office. after the binders were moved, they remained accessible to Agape employees. 20 The cooperating witness has proven to be reliable as information provided by him/her has been corroborated by other sources, including other witnesses, recorded conversations and records obtained during this investigation.

19

30 Agape's loan documents. investors Similarly, ("Investor according
3rt),

.~ ~ to an' interview
'.\_

',

of

one of KERYC's

whose identity

is known

to the government,

KERYC told Investor

3 that he had reviewed

Ag.§l.pe loan documents. 40. A review of Agape bank records revealed sent a wire transfer the principal that, on

or about June 5, 2007, Agape of $862,046, Loan.

in the amount Steel

which represented

for the United

That amount was significantly JASON KERYC, ANTHONY and others working

less than what the
I

defendants

MASSARO

ANTHONY

CICCONE

and for

DIANE KAYLOR, that loan.

at their direction,

raised

In fact, as set forth above,

each of the defendants, raised more Steel Loan For

and others working at their direction, than the actual amount Agape needed

personally

to fund the United

and the loan amount listed in the United example, KERYC raised nineteen

Steel Loan binder.

times the actual amount of the amount of the loani

loan; MASSARO CICCONE

raised six times the actual

raised fifteen times the actual amount of the loan; and amount of the loan. Steel Loan

KAYLOR raised almost three times the actual Additionally, the actual interest

rate for the United

was 13.5% for one year, not 14% for 70 days equaled 73% for one year). Accordingly,

(which would have.

it would have been for a 70-day Steel Loan

impossible investment borrower.

for Agape to pay investors with interest money derived

14% interest

from the United indicated

A review of Agape bank records

that the

31 money that Agape paid to individuals Steel Loan came from other Agape 41. inyestigation that invested ·in the United
~~

investors. obtained during this conclusion of

A review of records also indicated

that, at the purported received payments

the United Steel Loan, investors returns on their investments ANTHONY MASSARO

for purported

and the defendants received

JASON KERYC, for that

and DIANE KAYLOR

commissions

loan, despite repaid.

the fact that the United Agape

Steel Loan was never checks payable to the on or

Indeed, I have examined KERYC, MASSARO

investors,

and KAYLOR

from Agape containing Moreoverr

name United Steel on the memo line of the check. about April I, 2008, the defendant ANTHONY

CICCONE wrote an email of an

to Cosmo in which he stated that he earned a commission approximately $915rOOO for his work on the United the total amount

Steel Loanr

amount that exceeded

($862,046) that was

actually made to the borrower. 42. MASSARO's, None of the defendants CICCONE's JASON KERYC's, ANTHONY that were

ANTHONY

and DIANE KAYLOR's

investors

have been interviewed

in connection

with this investigation than was needed

told that Agape had raised more money United Steel Loan.

for the

Nor were they told that the money that they

invested

in the United Steel Loan was being used for any purpose Steel, or that the United

other than a bridge loan to United Steel Loan had not been repaid.

They also were not told that the

32

money returned successive E.

to them was actually

money that was:· obtained

from

investors, Carillon 43.

rather than from the United Steel

Loan.

Park Loan to investors and records interviewed in connection

According

with this investigation investigation,

obtained

during this JASON and

in or about September ANTHONY

2007, the defendants

KERYC, ANTHONY MASSARO, others working

CICCONE and DIANE KAYLOR, contacted

at their direction,

them about investing Park

in a bridge loan known as Carillon Park
Loan"). According to investors

(the "Carillon contracts

and Agape

that the sent to

defendants, investors defendants

and others working

at their direction,

in connection

with the Carillon

Park Loan, the

told investors

that the term of the loan was that Agape would pay to an

approximately approximately

30 days and promised 9% interest

for those 30 days, which equates 108%. assured

annual interest loans described

rate of approximately above, the defendants

As with the bridge investors that

there was little risk that they would lose money on this investment. Indeed, they told investors that there was only a 1% investors gave

risk of loss of their investment. Agape approximately $12.3 million

As a result,

for the Carillon

Park Loan.21 revealed

A review of records obtained
21

during

this investigation

by Agape

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

33

that KERYC, MASSARO, their direction, $2.5 million Loan. 44.

CICCONE

and KAYLOR,

and others: working

~~

at

raised approximately

$6.1 million,

$850,000, Park

and $975,000,

respectively,

for the Carillon

-

A review of the binder

containing

the loan

documents

for the Carillon

Park Loan revealed $1.4 million.

that the amount of

the loan was approximately records revealed

A review of Agape bank 29, 2007
1

that, on or about October

Agape

sent a the

wire transfer principal

in the amount of $1,013,916, Park Loan.

which represented

for the Carillon

That amount was JASON KERYC and

significantly ANTHONY abover

less than what the defendants

CICCONE raised for that loan. KERYC and CICCONE,

In fact, as set forth at their direction, needed

and others working

personally

raised more than the amount

that Agape actually

to fund the Carillon Carillon

Park Loan and the loan amount listed in the KERYC raised almost four times the

Park Loan binder.

actual amount of the loan and CICCONE actual amount of the loan.

raised almost two times the the actual interest

Additionally,

rate for the Carillon Park Loan was 14% for one year, not 9% for 30 days (which would have equaled it would have been 108% for one year) . for Agape to pay with interest money A review of Agape

Accordingly, investors derived

impossible

9% interest for a 30-day

investment

from the Carillon indicated

Park Loan borrower.

bank records

that the money that Agape paid to

34 individuals other Agape that invested investors. In addition to having access to the binders
l

in the Carillon

Park LO~~ came from

45. containing

the terms of the Carillon

Park Loan

the defendant

JASON KERYC knew that he personally

raised more than the total Park Loan. In an

amount that Agape needed to fund the Carillon email dated September brokers 17, 2007
1

KERYC advised

one of his sub-

that the amount of the Carillon above, the actual

Park Loan was $4 million.

As discussed million.

amount of the loan was $1.4 believed

Putting that aside, even if KERYC mistakenly Park Loan amount was $4 million, more money he

that the Carillon nevertheless himself. direction,

raised significantly

than that by at his

As set forth above, KERYC, raised approximately representatives 12, 2007
1

and others working

$6.4 million,

and KERYC knew that

other account

also raised money for this loan. KERYC received an email from Cosmo

Indeed, on October containing

a spreadsheet

that indicated

that Agape account $12.3

representatives million

had collectively

raised approximately

for the Carillon

Park Loan--more

than eight and a half

times the actual loan amount and more than three times the amount of the loan that KERYC stated in his September AccordinglYI KERYC knowingly 17, 2007 email. investors that

lied when he assured

their money would specifically Park Loan.

be used to fund only the Carillon indicated that the

A review of Agape bank records

35 vast majority of the money raised for the Carillon!Park trading. Loan was

used to pay other investors 46.

or for commodities revealed

The investigation

that the defendant rates paid by that Agape paid

JASON KERYC also knew that the actual Agape's borrowers could not support In October 2007
1

interest

the interest

to its investors. brokers

KERYC and one of his subbridge loan borrower. They

were contacted bridge

by a potential

asked Agape's potential

loan underwriter

for information In responsei

regarding on October

loan terms for this borrower.

26, 2007, the loan underwriter that set forth Agapeis Specifically, interest rates

sent an email to KERYC and others loan.

loan terms for a typical bridge wrote that Agape

the loan underwriter

charged

"between 13-15% plus 3-5 points" [were] 12 months.1I

and that

"[Agape's] underwriter

loan terms

In that email, the loan as a

advised KERYC to "please use this information Contrary to these disclosed promised

basis for other files."

loan terms,

KERYC and the other defendants returns on their investment what the loan underwriter 47.

repeatedly

investors higher than

that were significantly

indicated. JASON KERYC received

An email that the defendant

on May 141 2008 further establishes interest rates that Agape charged

that KERYC knew that the to its bridge loan borrowers

were insufficient

to support the exorbitant specificallYI

interest rates that Agape's bridge loan a

Agape paid to its investors. underwriter

sent KERYC and another person

an email attaching

36 document entitled
II

"Agape World Underwriting stated

Guidel'ihes for Loan

Application. disburse

That document

"Agape WORLD INC. shall only per annum rate that will
II

loans at a 13-15%

interest

be._ determined interest promised

by our internal

credit risk department.

That

rate was significantly to pay, and actually 48.

lower than the rates that Agape

paid to, its investors. bank records also indicated Park Loan,

A review of Agape's conclusion

that, at the purported investors

of the Carillon

received payments

for purported

returns on their MASSARO and

investments

and the defendants

JASON KERYC, ANTHONY

DIANE KAYLOR received that the Carillon examined KAYLOR

commissions

for that loan, despite Indeed,

the fact

Park Loan was never repaid. to investors,

I have and

Agape checks payable

KERYC, MASS~~O

from Agape containing Moreover,

the name Carillon on or about April

Park on the memo I, 2008, the

line of the check. defendant stated ANTHONY

CICCONE wrote an email to Cosmo in which he of approximately $85,000 for

that he earned a commission Park Loan.

his work on the Carillon 49. the defendant exchange Between ANTHONY

September MASSARO

23, 2008 and September

26, 2008,

received

copies of an email representing Carillon Park

between

Cosmo and an attorney

in which it was made clear that the Carillon repaid. repaid By that date, the Carillon a year earlier--in investors, October

Park Loan was never

Park Loan should have been According brought to Agape bank

2007.

records,

including

investors

in by MASSARO,

37

were paid purportedly addition, knowing MASSARO
l

for their investment

in Carillon

Park.

In

was paid a commission continued

for this loan.

Despite from

this

MASSARO

to solicit

and accept money

investors

for Agape as set forth below. 50. None of the defendants CICCONE/s JASON KERYC'sl ANTHONY that were

MASSARO/sl

ANTHONY

and DIANE KAYLORls

investors

have been interviewed

in connection

with this investigation

told that Agape had raised more money than was needed Carillon invested Park Loan.

for the

Nor were they told that the money that they Park Loan was being used for any purpose Park, or that the Carillon

in the Carillon

other than a bridge loan to Carillon Park Loan had not been repaid. money returned successive F.

They also were not told that the money that was obtained from

to them was actually
I

investors

rather

than from the Carillon

Park Loan.

Clemson Grande Loan 51. According to investors and records interviewed in connection

with this investigation investigation,

obtained
2007
1

during this JASON

in or about October MASSARO, ANTHONY

the defendants

KERYC

I

ANTHONY

CICCONE

and DIANE KAYLOR,and them about investing

others working in a bridge Loan").

at their direction,

contacted Grande

loan known as Clemson to investors

(the "Clemson Grande contracts that the sent to
l

According

and Agape

defendants, investors defendants

and others working in connection

at their direction,

with the Clemson Grande Loan

the

told investors

that the term of the loan was

38

approximately approximately annual

70 days and promised 14% interest

that Agape would' pay to an

for those 70 days, which equates 73%.

interest

rate of approximately above, the defendants

As with the bridge investors that

lo~ns described

assured

there was little risk that they would investment.

lose money on this that there was only a 1% investors gave

Indeed, they told investors

risk of loss of their investment. Agape approximately $68.3 million

As a result,

for the Clemson Grande Loan.22 this investigation revealed at

A review of records obtained that KERYC, MASSARO, their direction, million,

during

CICCONE and KAYLOR,

and others working $9.4

raised approximately

$24.5 million, respectively,

$14.5 million

and $2.5 million,

for the

Clemson Grande Loan. 52. documents A review of the binder containing the loan

for the Clemson Grande

Loan revealed

that the amount of was

the loan was approximately also prominently addition displayed

$5.6 million.

This information In

on the spine of the binder. containing

to having access to the binder

the actual

terms of the Clemson Grande Loan,

the defendant according

JASON KERYC knew to an interview

the actual terms of the loan because, of Sub-broker 1/ Sub-broker 1 reviewed

that binder and informed $5

KERYC that the Clemson Grande Loan was for approximately

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. Office, Sub-broker 1

~~

On a

subsequent noticed

visit to the Agape Hauppauge binders,

that the aforementioned

which had previously displayed. that, on

been openly displayed, 53.

were no longer conspicuously

A review of Agape bank records 12, 2007, Agape

revealed

or about October

sent a wire transfer

in the

amount of $4.2 million, Clemson Grande Loan. what the defendants CICCONE, loan.

which represented

the principal. for the less than

That amount was significantly JASON KERYC, ~~THONY MASSARO

and ANTHONY raised for that

and others working

at their direction,

In fact, as set forth above, KERYC, MASSARO at their direction, personally

and CICCONE, raised more in

and others working

than the actual Clemson Grande the Clemson Grande Loan binder.

Loan and the loan amount listed 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 Additionally, the actual interest amount of the loan.

rate for the Clemson Grande (which would have

Loan was 14% for one year, not 14% for 70 days equaled 73% for one year). Accordingly,

it would have been for a 70-day

impossible investment

for Agape to pay investors with interest money derived

14% interest

from the Clemson Grande indicated that the

Loan borrower.

A review of Agape bank records

money that Agape paid to individuals Grande Loan came from other Agape

that invested

in the Clemson

investors.

40

54.

A review of the Agape bank records conclusion of the Clemson returns

also indicated Grande Loan, on their MASSARO, for that

that, at the purported investors

received payments

for purported

iqyestments ANTHONY

and the defendants

JASON KERYC, ANTHONY

CICCONE and DIANE lCAYLOR received the fact that the Clemson Agape

commissions

loan, despite repaid.

Grande Loan was never checks payable to

Indeed, I have examined KERYC, MASSARO,

investors, containing

CICCONE

and KAYLOR

from Agape

the name Clemson Grande 55. On October ANTHONY

on the memo line of the check. JASON KERYC, learned that

31, 2008, the defendants CICCONE and DIANE KAYLOR

ANTHONY

MASSARO,

the Clemson Grande Loan had not been repaid, that they had been paid commissions investors had been paid interest

despite

the fact

and despite

the fact that for that loan. received 'an In

and principal

fact, the defendants,

and other Agape employees,

email from Cosmo informing

them that the Clemson Grande Loan had may be foreclosed. By that

not been repaid and that the property

date, the Clemson Grande Loan should have been repaid almost a year earlier--in investors December 2007. According to Agape bank records, in the Clemson

were paid returns In addition,

on their investment the defendants

Grande Loan.

were paid commissions

for raising money for this loan. interviewed in connection

None of the investors were told that of informing

with this investigation Instead

the Clemson Grande Loan was not repaid.

41 their investors of this material fact, the defendants
';.'~'~ ';

continued

to raise money from investors 56. ~~SARO'S,

for Agape as set forth below. JASON KERYC's, ~~THONY that were

None of the defendants CICCONE's

~~THONY

and DIANE KAYLOR's

investors

have been interviewed

in connection

with this investigation

told that Agape had raised more money than was needed Clemson invested purpose Clemson Grande Loan.

for the

Nor were they told that the money that they Loan was being used Grande, for any or that the

in the Clemson Grande other than a bridge

loan to Clemson

Grande Loan had not been repaid.

They also were not told money that was

that the money returned obtained from successive

to them was actually investors,

rather than from the Clemson

Grande Loan. G. 114 Parkway Drive Loan 57. According to investors and records interviewed in connection this JASON and

with this investigation investigation, KERYC, ANTHONY

obtained

during

in or about December MASSARO! ANTHONY

2007, the defendants and DIANE KAYLOR!

CICCONE

others working at their direction! bridge loan investment. According

contacted

them about another and Agape at their

to investors

contracts direction, defendants clientele" complex

that the defendants, sent to investors

and others working in connection

with this loan, the

stated that the loan was for a "repeat Agape World that would be used to purchase and renovate New York a sports (the "114

at 114 Parkway Drive

South, Hauppauge,

42 Parkway Drive Loan"). that the defendants/ to investors investors promised According to investors and Agape contracts sent

and others working

at their direction,

in connection

with this loan, the defendants- told 49 days and for

that the term of the loan was approximately that Agape would pay approximately to an annual abover

14% interest interest

those 49 days, which equates

rate of 104%. assured

As with the bridge loans described investors

the defendants

that there was little risk that they would lose money Indeed/ they told investors that there was

on this investment.

only a 1% risk of loss of their investment. investors gave the defendants

As a resultr for the during

more than $100.9 million of records obtained

114 Parkway Drive Loan.23 this investigation KAYLORr

A review

revealed

that KERYCr

MASSARO,

CICCONE and

and others working

at their direction, $12.3 million,

raised and

approximately $5.~ million, 58. Loan.

$41.1 million/ respectively,

$25.6 million

for the 114 Parkway Drive Loan. for the 114 Parkway Drive using Agape ANTHONY funds.24 and

There was no borrower the property

Insteadr

was purchased

The defendants

JASON KERYC/ ANTHONY

MASSAROr

CICCONE

23 This figure represents the total amount of money raised by Agape for the 114 Parkway Drive Loan/ which includes what the defendants raised as well as what other Agape account representatives raised. 24 A review of Agape bank records revealed that/ on December 3r 2007, Cosmo withdrew $175rOOO from Agape's bank accounts to make a down payment on this property. On March 14, 2008, $3.13 million was withdrawn from Agape's bank accounts to purchase this property.

43
.;_.~'~ ';

DIANE KAYLOR knew that the sports complex was owned by Agape because owned were prominently

at 114 Parkway

Drive

the names of the entities

that Agape

displayed

on a wall in the Agape Hauppauge was listed on that wall, of the Agape KERYC

O~fice and the name of this facility which I saw when I executed Hauppauge Office.

a search warrant

Also, on June 20, 2008, Cosmo forwarded for this property directing

a link to the website

KERYC to ucheck

this out. /' KERYC responded one of these days."

"l.ooks sick [.]

I want to come see it
29/ 2008,

Additionally,

on or about August

an article was published that Cosmo purchased $3.85 million facility.2S

in the Long Island Business

News stating for

a former paintball to convert

arena in Hauppauge

and intended

it into an indoor athletic forwarded a copy of

On September

9, 2008, KAYLOR

that article to Cosmo. 59. property The purchase price of the 114 Parkway Drive lower than the amount of money raised MASSARO, ANTHONY CICCONE The

was significantly

by the defendants

JASON KERYC, ANTHONY

and DIANE KAYLOR, and others working binder containing Loan revealed approximately the loan documents

at their direction.

for the 114 Parkway Drive of the loan was to records obtained for during

that the actual amount $3.5 million. According

this investigation!

Agape purchased

the property

25

million!

The actual purchase not $3.85 million.

price of the property

was $3.5

44 approximately million $3.5 million, but Agape raised apprOximately loan. $100.9

purportedly

for this bridge personally

As set forth above,

each of the defendants prjce of the property. million

raised more than the purchase approximately $41.1

In fact, KERYC raised

(more than ten times the actual purchase $12.3 million

price) i MASSARO

raised approximately actual purchase million

(more than three times the $25.6

price) i CICCONE

raised approximately

(more than six times the actual purchase $5.3 million

price) i and

KAYLOR raised approximately times the actual purchase 60.

(almost one and a half

price) . also indicated

A review of the Agape bank records conclusion

that, at the purported investors

of the 114 Parkway Drive Loan, returns on their CICCONE and

received payments

for purported

investments

and the defendants

JASON KERYC, ANTHONY for that loan.

DIANE KAYLOR received

commissions

Indeed, I have

examined Agape checks payable KAYLOR from Agape containing

to investors,

KERYC, CICCONE and

the name 114 Parkway Drive South on

the memo line of the check. 61. MASSARO's, None of the defendants CICCONE's JASON KERYC's, ANTHONY that were

ANTHONY

and DIANE KAYLOR's

investors

have been interviewed

in connection

with this investigation

told that this property

was owned by Agape. Instead,

Nor were they told KERYC, MASSARO,

the 114 Parkway Loan was for Agape. CICCONE and KAYLOR falsely claimed

that the 114 Parkway Drive clientele.
II

Loan was for a "repeat Agape World

Additionally,

'\

.,.
Drive

45

none of those investors were told that Agape had raised more money than was needed property. for the purchase of the 114 Parkway

They also were not told that the vast majority to them was actually rather money

of the from

money returned successive Loan.
H.

that was obtained

investorsr

than from the 114 Parkway Drive

508 W. 25th

Partners

Loan

62.

According

to investors

interviewed
2008r

in connection the defendants

with this investigationr

in or about March ANTHONY

JASON KERYC, ANTHONY MASSARO,

CICCONE

and DIANE KAYLORr them about (the that the

and others working at their direction, investing "508 Loan
ll ).

contacted

in a bridge

loan known as 508 West 25th Partners to investors and Agape contracts

According

defendantsr investors investors promised

and others working

at their directionr

sent to told

in connection

with the 508 Loan, the defendants

that the term of the loan was approximately that Agape would pay approximately to an annual

58 days and for

14% interest interest

those 58 days, which equates approximately defendants 88%.

rate of above, the

As with the bridge investors

loans described

assured

that there was little risk that they Indeed, they told investors As a

would lose money on this investment. that there was only al% resultr investors

risk of loss of their investment. approximately $13.7 million

gave Agape

for the

46
';";
~'~

508 Loan. 26 investigation

A review of records revealed

obtained

during t.h i.s CICCONE and KAYLOR, $6.5

that KERYC, MASSARO,

and others working miJlion, 508 Loan. 63. documents $946,000,

at their direction, $453,000

raised approximately respectively,

and $821,000,

for the

A review of the binder

containing

the loan

for the 508 Loan revealed $590,000.

that the amount of the loan

was approximately revealed transfer principal

A review of Agape bank records 6, 2008, Agape sent a wire which represented the less

that, on or about March

in the amount of $525,000, for the 508 Loan.

That amount was significantly MASSARO raised

than what the defendants KAYLOR, loan.

JASON KERYC, ANTHONY at their direction,

and DIANE for that

and others working

In fact, as set forth above,

KERYC, MASSARO personally

and KAYLOR, raised more

and others working

at their direction,

than the actual 508 Loan and the loan amount listed in the 508 Loan binder: loanj MASSARO KERYC raised eleven times the actual amount of the

raised one and a half times the actual amount of one and a half times the the actual interest rate (which

the loan; and KAYLOR raised almost actual amount of loan.

Additionally,

for the 508 Loan was 14% for one year, not 14% for 58 days would have equaled
26

88% for one year).

Accordingly,

it would have

This figure represents the total amount of money raised by Agape for the 508 Loan, which includes what the defendants raised as well as what other Agape account representatives raised.

47 been impossible day investment borrower. majority for Agape to pay investors with interest money derived 14% inte!rest for a 58from the 508 Loan indicated that the vast in

A review of Agape bank records

of money that Agape paid to individuals investors. access

that invested

the 508 Loan came from other Agape 64. containing interview defendant In addition

to having

to the binders to an

the actual terms of the 508 Loan, according of Sub-broker 1 and an email dated October

6, 2008, the

JASON KERYC was told that the actual amount of the loan Indeed, in an email dated October to 6,

was less than he raised. 2008, Sub-broker perform

1 told KERYC that he had hired a company on the 508 Loan and informed

due diligence revealed

KERYC that the

investigation only $590,000.

that the total amount of the 508 Loan was above, KERYC personally raised more

As discussed

than $6.5 million broker

for the 508 Loan.

In that same email, sub-

1 further told KERYC that Agape did not have a first lien on the 508 Loan, which was directly told investors. contrary to the

position

what KERYC and his sub-brokers email stated:

Specifically,

Due diligence was also performed for the 508 West Project. [A title company, whose identity is known to the government,] was contracted to investigate all open liens and mortgages for 508 West 25th street property. The only record connecting Agape to the project was a small subordinate mezzanine loan for $590,000. There was no record of the large 40 million dollar bridge loan spoke of by Nicholas Cosmo during the investor meeting with [Sub-broker l's company, whose

48
..... ¥~

identity is known to the government]. There was no record of additional phases (Phase 2 contract: May 14, 2008-July 18, 2008i Phase 3 contract: August 4, 2008 - October 17, 2009) on record. Furthermore, ACRIS shows the development rights for the 508 West 25th project were given to [a realty company, whose identity is known to the government,] for around 2 million dollars on 6/30/08. According to the defendants' investors that have been interviewed KERYC did not relay this for

in connection information Agape. working

with this investigation,

to any of them.

Nor did KERYC stop raising money this email, KERYC, and others approximately $19.8 million

Instead,

after receiving

at his direction,raised
27

in

new money from investors. 65. the information

Not only did the defendant that he learned

JASON KERYC withhold l's investigation

from Sub-broker

from his investors,

but he also affirmatively For example,

lied about the 17, 2008--eleven

status of the 508 Loan. days after learning

on October

the results of Sub-broker stating

l's due diligence-"everything is good

KERYC wrote an email to an investor with the brokers invested [508 Loan Phase 3J.1I for not convincing

KERYCalso

admonished

his sub-

investors

to reinvest loans.

the money they Specifically, to his

in the 508 Loan into other bridge

on October sub-brokers
27

29, 2008, KERYC wrote in an email addressed "on the [508 Loan] phase

III we had an extremely

As described above, new money does not include money that the defendants convinced investors to rollover from a prior bridge loan. It only includes money raised from new investors or additional money raised from prior investors.

49

large check request

. . . I understand

this environment

is tough

but we need to be tougher. here ... we need to work harder

guys this is our jobs at risk at trying keep these people in

th~ loans." 66. A review of Agape bank records conclusion also indicated

that, at the purported received payments

of the 508 Loan, investors and

for purported

returns on their investments MASSARO and DIANE KAYLOR

the defendants received payable

JASON KERYC, ANTHONY for that loan. KERYC, MASSARO

commissions to investors,

I have examined and KAYLOR

Agape checks

from Agape

containing

either the name 508 West Partners

or 508 West Partners

Phase 2 on the memo line of the check. 67. MASSARO's, interviewed None of the defendants CICCONE's JASON KERYC's, ANTHONY

ANTHONY

and DIANE KAYLOR's

investors were told that

in connection

with this investigation

Agape had raised more money than was needed Nor were they told that the money

for the 508 Loan. in the 508 loan to

that they invested

Loan was being used for any purpose
508 West

other than a bridge

Partners.

They also were not told that the vast to them was actually money that

majority

of the money returned from successive

was obtained Loan. I.

investors,

rather than from the 508

Goldan Loan 68. According to investors and records interviewed in connection this

with this investigation

obtained

during

50

investigationr
KERYCr

in or about April ANTHONY

2008r

the defendants

JASON and

ANTHONY MASSAROr

CICCONE and DIANE KAYLORr contacted

others working in_a bridge to investors working

at their directionr

them about investing According and others with

loan known as Goldan and Agape contracts

(the "Goldan Loantt). that the defendantsr

at their directionr

sent to investors told investors

in connection

the Goldan Loanr the defendants the loan was approximately pay approximately

that the term of that Agape would

70 days and promised

12% interest

for those 70 daysr which equates 63%. As with the investors

to an annual interest rate of approximately bridge loans described abover the defendants

assured

that there was little risk that they would lose money on this investment. Indeedr they told investors that there was only a 1% investors gave A

risk of loss of their investment. Agape approximately $30.1 million during

As a resultr

for the Goldan Loan.28 this investigation

review of records obtained that KERYC, MASSARO, their direction, million,

revealed at

CICCONE

and KAYLOR,

and others working $14.1 millionr

raised more approximately and $2.2 millionr

$3.9

$2.3 million

respectivelYr

for the

Goldan Loan. 69. documents A review of the binder containing the loan

for the Goldan Loan claimed

that the amount of the loan

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

51 was approximately representative $3.5 million. However, according'to a

of Goldan and a review of Agape bank recordsr That amount was s_ignificantly MASSARO, at their

Agape only loaned Goldp.n $500,000. le~s than what the defendants ANTHONY

JASON KERYC, ANTHONY

CICCONE and DIANE KAYLOR, raised for that loan. personally

and others working

direction,

In fact, as set forth above, raised more than the actual 28 times the actual

each of the defendants

amount of the Goldan Loan. amount of the loani MASSARO

KERYC raised

raised more than eight times the raised more than four times raised more than four the actual

actual amount of the loan; CICCONE

the actual amount of the loani and KAYLOR times the actual amount of loan. interest

Additionally,

rate for the Goldan Loan was 15% for one year, not 12% (which would have equaled it was impossible 63% for one year) . to pay investors 14% from

for 70 days Accordingly, interest

for Agape

for a 70-day investment

with interest money derived

the Goldan Loan borrower. indicated

A review of Agape bank records of money that Agape paid to

that the vast majority that invested

individuals

in the Goldan Loan came from other

Agape investors. 70. containing In addition to having access to the binders according to

the purported

terms of the Goldan Loanr

an interview the defendant

of Sub-broker

1 and an email dated October

6, 2008,

JASON KERYC was told that the actual amount of the lower than what KERYC raised for

Goldan Loan was significantly

52

that loan.

Indeed, according

to Sub-broker

I, he 'Contacted a

representative
$500,000.

of Goldan and learned above,

that Goldan had borrowed working for the this In that at

As discussed

KERYC, and sub-brokers $14.1 million 1 relayed

hi$ direction, Goldan Loan. information

had raised approximately Shortly thereafter,

Sub-broker

to KERYC in an email dated October 1 further

6, 2008.

same email, Sub-broker have a first position contrary response,

told KERYC that Agape did not

lien on the Goldan Loan, which was directly told investors. phases In

to what KERYC and his sub-brokers

KERYC stated that there were additional Sub-broker

in the of Goldan did not 1

Goldan project.

1 spoke to a representative was not true. Again!

who told him that KERYC's borrow any additional

statement

Goldan

money

from Agape.

Sub-broker

relayed this information investors

to KERYC.

According

to the defendants' with this to any of Instead! at

that have been interviewed

in connection

investigation, them.

KERYC did not relay this information money KERYC,
$19.8

Nor did KERYC stop raising this information, raised approximately

for Agape.

after receiving his direction, from investors. 71.

and others working million

in new money

A review of the Agape bank records also indicated conclusion of the Goldan Loan! investors on their investments ANTHONY CICCONE and and

that, at the purported received payments

for purported

returns

the defendants

JASON KERYC, ANTHONY commissions

MASSARO,

DIANE KAYLOR received

for that loan.

Indeed,

I have

53

examined CICCONE

Agape checks payable and KAYLOR from Agape

to investors, containing

KERYC,MASSARO,

either the name Goldan

or Goldan

Phase 2 on the memo line of the check. 72. None of the defendants CICCONE's JASON KERYC's, ANTHONY

MASSARO's, interviewed

ANTHONY

and DIANE KAYLOR's

investors were told that

in connection

with this investigation than was needed

Agape had raised more money

for the Goldan Loan. in the

Nor were they told that the money

that they invested

Goldan Loan was being used for any purpose loan to Goldan. of money returned from successive
J.

other than a bridge

They also were not told that the vast majority to them was actually rather Loan interviewed in connection money that was obtained

investors,

than from the Goldan Loan.

144 East 30th Street

73.

According

to investors and records

with this investigation investigation, ANTHONY working bridge

obtained

during this JASON KERYC,

in or about July 2008, the defendants CICCONE and DIANE KAYLOR,

MASSARO, ANTHONY

and others in a

at their direction,

contacted

them about investing (the "144 Loan") .

loan known as 144 East to investors

so=

Street contracts

According

and Agape

that the defendants, in that that

and others working at their direction, connection

sent to investors

with the 144 Loan, the defendants

told investors

the term of the loan was approximately Agape would pay approximately which equates to an annual

60 days and promised

12% interest

for those 60 days, 73%.

interest

rate of approximately

54 As with the bridge investors loans described above, the defendants assured

that there was little risk that they would Indeed, they told investors

lose money

on this investment.

that there was

only a 1% risk of loss of their investment. investors Loan.29 revealed working gave Agape approximately

As a result, for the 144

$40 million during

A review of records

obtained CICCONE

this investigation and others $21.2 million, for

that KERYC, MASSARO, at their direction, $3.4 million

and KAYLOR,

raised approximately and $2.6 million,

$5.3 million, the 144 Loan. 74. ANTHONY

respectively,

The defendants

JASON KERYC, ANTHONY

MASSARO,

CICCONE and DIANE KAYLOR

knew that they raised more money A review of the binder that the In

than the amount of the 144 Loan. containing the loan documents

for the 144 Loan revealed

actual amount of the loan was approximately addition to having access to the binder

$1.6 million. that

containing

information,

on June 26, 2008, the defendants bridge loan underwriter

and others received attaching the loan

an email from Agape's

terms for the 144 Loan.

Specifically,

the attachment $1.6 million. during this

indicated As set

that the loan amount was approximately forth above, a review of records investigation revealed

obtained

that each of the defendants

personally

This figure represents the total amount of money raised by Agape for the 144 Loan, which includes what the defendants raised as well as what other Agape account representatives raised.

55

raised more than that. million; MASSARO

Indeed,

KERYC raised approximately $5.3 million; CICCONE

$21.2

raised approximately $3.4 million;

raised approximately approximately knowingly

and KAYLOR raised
I

$2.6 million.

Accordingly

the defendants them that their A for

lied to investors

when they assured

money would specifically

be used to fund only the 144 Loan. indicated that the money raised

review of Agape bank records

the 144 Loan was used to pay other investors trading. Despite this, the defendants for Agape

or for commodities to solicit and

continued

accept money from investors 75. KERYC, ANTHONY In addition MASSARO,

and AMA as set forth below. the defendants JASON that

to informing CICCONE

ANTHONY

and DIANE KAYLOR

they each raised more money than the amount of the 144 Loan, the attachment defendants to the June 26, 2008 email further that the interest informed the

rate for the 144 Loan could not that the defendants the attachment promised to

support the exorbitant their investors. interest

profits

Specifically,

showed that the But

rate for the 144 Loan was only 16% for one year. had promised to pay their investors

the defendants

12% for 60 the

days, which equates to 73% for the year. defendants knew that a 12% investment to pay investors,

Accordingly,

return

for 60 days, which

they promised borrower. 76.

could not come from the 144 Loan

A review of Agape

bank records also revealed Those

that

Agape did not lend any money to 144 East 30~h Street.

records

indicated

that, at the purported

conclusion' of the 144 returns on their

.. .
,

56

Loan, investors investments MA$SARO

received payments

for purported

and the defendants commissions

~~THONY

CICCONE and ~~THONY the fact that

received

for that loan, despite Indeed,

the 144 Loan was never made. checks payable containing check. 77. MASSARO's, to investors,

I have examined Agape from Agape

CICCONE and MASSARO

the name 144 E.

30th Street on the memo line of the

None of the defendants CICCONE's

JASON KERYC's,

ANTHONY that were

ANTHONY

and DIANE KAYLOR's

investors

have been interviewed

in connection

with this investigation than was needed

told that Agape had raised more money Loan.

for the 144 in

,Nor were they told that the money

that they invested

the 144 Loan was being used for any purpose loan, or that the 144 Loan was never made. told that the money returned obtained Loan. K. Carriage 78. Homes Loan to investors and records from successive

other than a bridge They also were not money that was

to them was actually rather

investors,

than from the 144

According

interviewed

in connection

with this investigation investigation, ANTHONY working bridge

obtained

during this JASON KERYC,

in or about July 2008, the defendants CICCONE and DIANE KAYLOR,

MASSARO, ANTHONY

and others in a

at their direction,

contacted Homes

them about investing

loan known as Carriage

(the "Carriage Homes Loan").

57
'l-~'j~.

According

to investors

and Agape contracts
l

that the'defendants, in told

and others working at their direction connection inyestors promised

sent to investors

with the Ca rr Laq e Homes Loan , .t.he defendants that the term of the loan was approximately

63 days and for

that Agape would pay approximately
1

12% interest interest

those 63 days approximately defendants

which equates 70%.

to an annual

rate of above
1

As with the bridge investors

loans described

the

assured

that there was little risk that they Indeed
l

would lose money on this investment. that,there result
l

they told investors As a for the

was, only a 1% risk of loss of their investment. gave Agape approximately $139.4 million obtained
1

investors

Carriage

Homes Loan.30 revealed

A review of records that KERYC
1

during this
1

investigation

MASSARO

CICCONE and KAYLOR

and others working at their directiont million, $17.6million
l

raised approximately and $6.5 milliont

$62.5

$26.3 million

respectively, 79.

for the Carriage According

Homes Loan. of Carriage Homes Homes

to a representative
1

and a review of Agape bank records less than $250 000.
1

Agape

loaned Carriage

That amount was significantly
t

less than what CICCONE and

the defendants DIANE KAYLOR, that loan.
30

JASON KERYC

ANTHONY

MASSARO,

ANTHONY

and others working

at their directiont
1

raised for

In factt as set forth above

each of the defendantst

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

and others working at their direction, than the actual Carriage $62.5 million

personally

.

58
"

"raised more

Homes Loan: KERYC raised approximately

(250 times the actual amount of the loan),i MASSARO $17.6 million (70 times the actual $26.3 million amount of

ra~sed approximately

the loan); CICCONE raised approximately the actual

(105 times

amount of the loan) i and KAYLOR raised approximately (26 times the actual amount of the loan)" None of the defendants CICCONK's JASON KERYC's, ANTHONY that were

$6.5 million 80. MASSARO's,

ANTHONY

and DIANE KAYLOR's

investors

have been interviewed

in connection

with this investigation

told that Agape had raised more money than was needed Carriage invested Homes Loan.

for the

Nor were they told that the money that they

in the Carriage Homes Loan was being for any purpose

other than a bridge loan. 81. soliciting During the same time period for the Carriage that Agape was Home Loan, on July 24,

investor money

2008, the defendant representative,

JASON KERYC and a fellow Agape account emails about how an Agape employee

exchanged

("Employee 1"), whose identity possessed information

is known to the government, if she lost her "[Employee 1]

that could bring down Agape Specifically, Sometimes

job and decided to, talk. is a grimy bitch though.

KERYC wrote

she tells

[Cosmo] everything KERYC's

but that is why I think he likes her." fellow account representative trust her either bro responded

In response,

"Wow, Yea bro I don't

. . . u kno the shot that would occur if she

,_

.

59

lost her job ... place big time." 82. defendant questions August

forget about it she would fuck :up this whole

Shortly after that email communication, his displeasure condition.

the

JASON KERYC voiced about Agape's

with being asked Specifically, on

financial

5, 2008, one of KERYC's

sub-brokers investor

forwarded

KERYC a list loan "tell

of questions history

posed by a potential condition.

about Agape's

and financial

In response,

KERYC wrote

the client to lick my balls." 83. Slightly less than two months later, on September MASSARO,

22, 2008, Cosmo and the defendants ANTHONY

JASON KERYC, ANTHONY

CICCONE and DIANE KAYLOR mailed

a letter to all investors Homes borrower was

in which it was stated that the Carriage unable granted to repay Agape in a timely manner the borrower an additional

and that Agape had

90 days to repay the loan a copy of that letter

principal

and interest.

Cosmo also emailed

to the defendants. 84. At around this same time, Agape was struggling funds to continue operating the Ponzi scheme. MASSARO, ANTHONY to

raise sufficient As a result,

the defendants

JASON KERYC, ANTHONY

CICCONE and DIANE KAYLOR were asked to delay cashing checks and to lend Agape money. a new policy that any investor to meet with Additionally, wishing Agape

commission implemented from on

to withdraw

money

Agape was required September

Cosmo first. CICCONE,

Specifically,

23, 2008, KERYC, MASSARO,

KAYLOR and others

60 received an email informing them that \\[n]o account~ for [AMA] or

[Agape] will be closed unless personally,

the client meets with Nicholas On September 24, 2008, who

as per his instructions."

KAYLOR had an email exchange wanted to withdraw job.

with Cosmo regarding

an investor

money from Agape because

his wife had lost her

Cosmo told KAYLOR that the investor his money.

would not be permitted to \\tell him no don't

to withdraw

He also told KAYLOR

take any money out and that you will go out on a date with him if he doesn't." 85. defendants At around this same time, Cosmo pressured MASSARO, ANTHONY CICCONE the and

JASON KERYC, ANTHONY and the defendants

DIANE KAYLORr

in turn pressured

oth~rs working

at their direction, investors September

to raise additional invested

money and to convince in Agape. For exampler on

to keep their money
26r 2008r

KERYC, MASSARO, a message

CICCONE,

KAYLOR and other

Agape employees

received

from Cosmo stating:

we NEED to start raising money as a firm. I cannot stress this enough. We have, sent out over 50 million dollars in the last 60 days alone. We need a few more successful loans to ride out the storm ... It is imperative that you all raise funds for this short term loan. We have not covered a check request in 6 months. The firm assets under management has marketly decreased due to several different reasons. Three days later, Cosmo told the defendants employees in an email \\[t]hrow your clients these times. and other Agape a bone so they stay

with you through

You will make money on them in the

61 near future. If they are not hare [sic] after thes~ next two to call. Some of you

cycles you will not have a book of clients are almost out of business do~

as we speak so I suggest you don't cut

your clients too much." L. Bed Four Loan 86. In or about September 2008, while Cosmo and the ANTHONY CICCONE and another

defendants

JASON KERYC, ANTHONY attempted

MASSARO,

DIANE KAYLOR bridge

to keep the Ponzi scheme going,

loan known as Bed Four According

(the "Bed Four Loan") was offered interviewed in connection

to investors.

to investors and Agape

with this investigation and others working connection working

contracts

that the defendants, in

at their direction,

sent to investors

with the Bed Four Loan, the defendants, told investors

and others

at their direction,

that the term of the that Agape would pay to an

loan was approximately approximately annual

72 days and promised

12% interest

for those 72 days,. which equates 61%.

interest

rate of approximately above, the defendants

As with the bridge investors that

loans described

assured

there was little risk that they would investment.

lose money on this that there was only a 1% investors gave A

Indeed, they told investors

risk of loss of their investment. Agape approximately $42.1 million

As a result,

for the Bed Four Loan. 31

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

62

review of records obtained that KERYC, MASSARO, their direction, mi+lion,

during

this investigation

revealed at

CICCONE

and KAYLOR, and others· working $21.8 million, respectively, $5.3

raised approximately

$3.3 million and $3.1 million,

for the Bed

Four Loan. 87. documents purported A review of the binder containing the loan

for the Bed Four Loan revealed loan was approximately

that the amount of the A review of that the at

$4.1 million.

records obtained defendants

during this investigation MASSARO,

revealed

JASON KERYC and ANTHONY personally

and others working

their direction, loan contained employed

raised more than the amount of the and, as the defendants knew, Agape for this loan. $42.1

in the binder

other brokers who were also raising money

Indeed, as set forth above, Agape million for that loan. 88. interview According

raised approximately

to a review of Agape bank records,

an is

of an Agape employee

("Employee 2"), whose identity Employee

known to the government,

and emails between to Bed Four.

2 and Cosmo, DIANE

Agape did not lend any money KAYLOR knew that, despite approximately $3.1 million

The defendant

the fact that she had raised for the Bed Four Loan, Agape never In December 2008, according to an

made a loan to Bed Four. interview of Employee

2, Employee

2 told KAYLOR that Agape never knowing this, KAYLOR 29,

loaned Bed Four any money. continued

Despite

to raise money for Agape.

She also, on December

63

2008, submitted accounting

a request exceeding asking

$1 million

to Agapers purported returns

department

for her investorsr

on their investment commission

in the Bed Four Loan and asked to be paid her the fact that she knew that the

for that loanr despite

Bed Four Loan was never made. investors,

I(AYLOR also falsely told and

in an emailr that the Bed Four Loan was in default closed and could not be funded by the

that U[t]he contract[] borrowers.
1t

That was a lie because

!(AYLOR well knew that Agape

never made a loan to Bed Four. 89. MASSARO's, None of the defendants CICCONE's JASON KERYCrsr ANTHONY investors that were

ANTHONY

and DIANE KAYLOR's

have been interviewed

in connection

with this investigation than was needed

told that Agape had raised more money Four Loan.

for the Bed

Nor were they told that the money that they invested for any purpose other than a

in the Bed Four Loan was being used bridge loan to Bed Four. Finally,

they were not told that Agape

did not lend money to Bed Four. M. November 3, 2008 to January 26, 2009 90. defendants On November
I

3, 2008

1

Cosmo wrote an email to the ANTHONY advising CICCONE and

JASONKERYC
I

ANTHONY

MASSARO,

DIANE !(AYLOR

and other Agape default

employees,

them that Agape
II

was "now on extension/ That included United Steel
l

on every loan we did last year.
l

several bridge" loans Carillon

such as Gala Resourcesr Grander which should have

Park and Clemson

,

been repaid months investors

earlier.

According

to Agape bank records, for those bridge the defendants

..

64

were paid returns

on their investment In addition,

loans prior to November weFe paid commissions November 3, 2008. 91.

3, 2008.

for raising money

for those loans .prior to

In addition

to advising CICCONE

the defendants

JASON

KERYC, ANTHONY MASSARO,

ANTHONY

and DIANE KAYLOR that all or

the loans that were made in the prior year were on extension default, Cosmo admonished the defendants
if

that " [a]ny one sharing heeded Cosmo's

this email will be terminated. warning. MASSAROts, interviewed

The defendants

None of the defendants ANTHONY CICCONE's

JASON KERYC's, ANTHONY investors were told Agape

and DIANE KAYLOR's

in connection

with this investigation on all the bridge

was "on extension/ in 2007. investors, investors bridge

de f au Lt;"

loans that it made fact from

Not only did MASSARO but, on December

hide this material
1

9, 2008

he sent a letter to his the state of Agape's wrote that the loan.
if

in which he falsely

represented

loan business.

Specifically,

MASSARO

Carriage

Homes Loan was Agape's

"only extended

MASSARO

knew that this statement

was false because

Cosmo had specifically on

advised him and others that Agape was "on extension/default every loan [they] did last year." 92. affairs In addition to concealing

the state of Agape/s JASON KERYC, ANTHONY

from its investors,

the defendants

65 MASSARO, ANTHONY CICCONE and DIANE KAYLOR, continued and others working of dollars for at

their direction, Agape.

to raise millions

For example,

on December

8, 2008, IC~YLOR sent an email to in Agape, despite knowing

inyestors

asking them to keep investing

that all its prior years' Specifically,

loans were in extension

or default.

KAYLOR wrote:

Agape has been very good to all of us and the money has been flowing very strongly for a long time. Now it's our turn to give back to the company with keeping our money where it is and trusting the changes. So we will have a company that will continue to make us all a lot of money in the future. A review of Agape bank records 2008 and January their direction, for Agape and MASSARO revealed that between November and others working at

26, 2009, the defendants, raised approximately

$l7.4 million

in new money

AMA.32

KERYC raised approximately $2.5 millioni and KAYLOR

$12.2 millioni

raised approximately $l.6 millioni

CICCONE raised approximately $l.l

approximately million. 93. CICCONE November

raised

Despite

the fact that the defendant investors

ANTHONY

actively

solicited

for Agape and AMA between

3, 2008 and January During

26, 2009, he advised me not to acting

invest in Agape. in an undercover

the course of this investigation, I posed as both an investor

capacity,

and a

As described above, new money does not include money that the defendants convinced investors to rollover from a prior bridge loan. It only includes money raised from new investors or additional money raised from prior investors.

66

borrower several

at different employees

times.

In those roles, including

I communicated CICCONE, and

with

of both companies,

investors

about their investments,

how they became

involved

with

Ag~pe or ~_,

and what representations

had been made to them, CICCONE contacted me. with

Soon after I began talking to investors, On November CICCONE, 5, 2008, I had a lengthy

telephone

conversation that

which conversation CICCONE stated

was recorded.

During

conversation, paid because

that some investors

were not getting CICCONE asked he

there was a loan that was overdue.

why I was talking to investors

and asked me to stop because

was afraid they would get nervous, in investing investigation. discouraged

I told him I was interested I was doing an CICCONE

and he told me that he thought
33

At some point

in the conversation, stating:

me from investing,

\\Now isn't a good time.

Not that it's a scam or anything. that was on extension. company.

It's just that I had a deal -- I don't own the

So I was a little

I'm a broker./I 94. According to an interview of one of the defendant with whom is known to the

ANTHONY CICCONE

CICCONE's grew up

investors, ("Investor 4/1)

who was an individual and whose identity

government,

CICCONE told Investor

4 that he had advised me that Investor 4, who had

it was a bad time to invest in Agape. approximately
33

$80,000 invested

in Agape,

was upset and demanded

Although I was posing as a potential was aware that I am employed by the USPIS.

investor,

CICCONE

67

to know the truth about Agape. pull his money out of Agape. withdraw
.',

In response, At that point,

CICCONE

.~ -,

told him to

Inves.tor 4 tried to

his money, but was unsuccessful. other investors

None of the in connection

defendants'

that were interviewed

with this investigation thereafter, by CICCONE,

were told, in November

2008 or that it

or any of the other defendants, To the contrary,

was a bad time to invest in Agape. November 2008 and January

between to

2009, CICCONE persuaded

individuals

invest approximately 95. attended meeting

$1.6 million 18
1

in new money in Agape. a meeting that was which

On November

2008, during

by Cosmo, the defendant

JASON KERYC and others,

was recorded by a former Agape employee, its investors. Further,

Cosmo admitted

that Agape overpaid

Cosmo stated:

With the people that are going around looking at us, if we bounce a fucking check, excuse my language, we're done. Alright? They're waiting. They're waiting for a reason to come in through the doors. Now this could be my own paranoia or whatever else it might bel or it could be justified. In response replied to a question of what his biggest dollars That's fear was, Cosmo . Cosmo

"Another 10 million fear ...

leaves the company

Thatls my biggest

the only fear I have,lI employees

once again informed KERYC and other Agape now we have 20 million dollars

that "right

in principal ... all

that's owed to us . '07 .. 20 million

. from loans that we did last year

dollars worth of loans that have not paid back. to start getting back in June.

We were supposed

SOl uhl you know, the Clemson

68 Grande, X-Arena, United Steel, Northway, uh, Lyons.

': 'l:
1I

He also

told KERYC and others are either on default

that "we've got 8 or 9 loans right now that or extension from '07." By that date, to Agape bank returns on

those loans should have been repaid. records, investors received payments

According

for purported

their investments received

in those loans, and all four of the defendants for raising money for those loans. Cosmo
II

commissions

also told KERYC that "we don't make 80% a year on our money. 96. January At around this same time, between became concerned October

2008 and

2009, when investors

that they may lose ANTHONY MASSARO
t

their investments, ANTHONY

the defendants

JASON KERYCt

CICCONE and DIANE KAYLORt

and others working

at their insurance with

direction, policy.

preyed on that fear by offering to investors and records interviewed obtained falsely

a fictitious

According

in connection this

this investigation investigation, insurance

during

the defendants

told investors

that the PPP

plan would protect to investors

their investments.

The defendants the PPP

represented insurance secured

that individuals

who purchased

plan would own a portion of the bridge

of the liens that purportedly But there was no revealed that the

repayment plan.

loans.

insurance

A review of Agape bank records employees
t

defendants, approximately

and other Agape $865,000

collectively plan.

raised

for the PPP insurance

97. executed

On January

26, 2009, law enforcement at the Agape Offices

officers Cosmo.

search warrants

and arrested

69

A review of Agape records and January million

indicated

that, between 'October 2003 invested over $400

2009, over 5,000 individuals

in Agape and AMA.

Of those 5,000 investors, lost a total of approximately $179

approximately million.

4,100 investors

WHEREFORE,

your deponent

respectfully

requests

that the

Court issue arrest warrants ANTHONY MASSARO, ANTHONY

so that the defendants

JASON KERYC,

CICCONE

and DIANE KAYLOR may be dealt

with according

to law. disclosure of the contents Warrants of this would

Because premature Complaint jeopardize and Affidavit an ongoing

in Support

of Arrest

investigation

and could result in flight of destruction requested of evidence that this and

the defendants, intimidation

targets and subjects,

of witnesses,

it is further

70

Affidavit

and accompanying

arrest warrants

be sealed and remain

under seal until further order of the Court.

1G.-c--'l~Z
RICHARD USPIS CINNAMO

/J.~

/l

r

0--vA..__.-/'--er-;1

Sworn to before me this day Of~ 20

/

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