North Country Gazette – The brother of the former chief financial officer of the bankrupt hedge fund firm Bayou Group LLC has been sentenced to 21 months in federal prison of his role in concealing a $400 million fraud.

Matthew Marino, brother of Daniel Marino, was also ordered to pay $60 million in restitution.

Prosecutors say that Marino knew about the fraud on the investors in the now-collapsed Bayou Hedge Funds and took steps to conceal it. His brother is serving 20 years for the scheme as is Bayou co-founder Samuel Israel.

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New York (HedgeCo.Net) – Nicholas Cosmo, head of New York-based Agape World Inc., has been arrested for allegedly running a $400 million Ponzi scheme.  His company, which marketed commercial bridge loans, was not registered with the U.S. Securities and Exchange Commission.

“Some of the early investors made money but as this scheme started to crumble, the later investors did not see a penny,” said one law enforcement official, referring to the classic Ponzi scheme, where new money coming in is used to pay off earlier investors. 

Agape World Inc. had bragged to clients that they posted consistent returns of around 14 percent.  Had investors performed a due diligence on Cosmo, they would’ve found that he was convicted in 1999 of fraud and sentenced to 21 months in prison. 

Agape World Inc. was essentially aiming to be an asset based lender.  They supposedly provided project loans on construction, acquisition loans and provided financing for unfinished properties. 

The trouble in the markets lately has highlighted the immense presence of Ponzi schemes all around the country.  Even after the $50 billion Madoff debacle, a handful of Ponzi schemes and fraudsters have floated to the surface.  Arthur Nadel of Sarasota, Florida, disappeared along with his client’s $350 million in cash.  Shortly after, Michael Riolo of Boca Raton was targeted, accused of bilking $50 billion out of investors.

Julie Scuderi
Senior Editor for HedgeCo.Net
Email: julie@hedgeco.net

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