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Rip-Off Alert: Victims lose $400M to 'mini-Madoff'

Reported by: Marie Mortera
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Updated: 4/02/2013 6:08 pm
LAS VEGAS (KSNV MyNews3) -- He was once an up and coming stockbroker but he turned to a life of crime in order to save his own skin.

In this Rip-Off Alert, here is the story of the man some people call the mini-Madoff.

"Seemed legit; I never heard of the word Ponzi," Sal said.

He learned the definition the hard way. His family lost a half-million dollars in a $400 million Ponzi scheme run by Nicolas Cosmos.

"You have a guy who supposedly looks into your eyes, tells you everything is fine, says you're going to get your money back, shakes your hand and gives you a hug. He's stealing your money,” Sal said.

He wasn't alone. Six thousand people invested in Agape World, the company cosmos claimed made money from short-term lending to businesses.

"He promised to pay investors anywhere from 10 (percent) to 15 percent interest on these loans that were typically 60 days or there about," said U.S. Postal Inspector Richard Cinnamo.

At that rate, investors could make 60 percent to 80 percent on their money. That might sound good -- but it wasn't a reality.

"We did undercover work, posing as an investor a prospective borrower to see if this project was feasible,” Cinnamo said. “I quickly learned it was not."

Initial investors got interest checks but were asked to roll over their money, which is typical for a Ponzi scheme. Cosmos also had a habit that put him in a financial hole.

"His vice was gambling,” Cinnamo said. “Cosmos used over $80 million to trade on the futures markets. It was his choice to do that, but the investors had no idea he was doing that."

Postal inspectors say research money matters.

"When someone tells you anything pays handsomely is risk-free, you need to run the other way. It's a scam," Cinnamo said.

Cosmos pleaded guilty and received 25 years in prison. He was also ordered to pay $179 million in restitution.
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