Victims of Nicholas Cosmo, the Long Island Ponzi schemer, are now being asked by courts to return money they withdrew just before the scheme collapsed, outraging many investors, Fox News reports.
In the best of times, investments can be uncertain, but especially in these tough economy times. But what the Great Recession has done is exposed the many financial schemes that investment specialists have concocted to rip off people and strip them of their hard-earned savings. Investment Lawyers are prepared to represent anyone who has been ripped off by investment firms and people who make false claims about money-making schemes.
Cosmo pleaded guilty to mail and wire fraud in 2010 as part of a $413 million Ponzi scheme through his company, Agape World Inc. in Hauppauge. He was also convicted of mail fraud in 1999 and allegedly used more than $200,000 from Agape to pay for restitution in that case. He faces up to 40 years in prison.
A Ponzi scheme occurs when an investment group finds investors to give them money, usually promising outrageous returns on their contributions. The scheme pays early investors with money from the new investors and eventually is doomed to collapse because it is unable to sustain those kinds of payouts. Typically, the people running the investment take money for themselves, while ripping off the investors. The term was named after Charles Ponzi, who used the technique in 1920.
Fox News reports that because there are federal bankruptcy court lawsuits pending, investors are being ordered by judges to return money they withdrew from the investment scheme, even if they thought it was interest and used it to pay bills or make other purchases. Some people interviewed said they lost tens of thousands of dollars and are now being ordered to pay back even more money. The law is designed to prevent investors from getting preferential treatment if they withdrew money 90 days before a scheme collapses.
Investment brokers, fund managers and other workers who have the power to control people's money are always facing criticism when an investment idea goes south. It's possible that allegations of securities fraud and other wrongdoings can threaten the health of a business or company.
While our firm represents victims in cases like this, we are also well-equipped and have experience defending companies accused of wrongdoing. While there have definitely been many examples of high-profile investment and financially based schemes, there are also empty allegations made every day because the Great Recession has trampled on people's savings and caused them great harm.
Sometimes it isn't fraud, but simply an economic downturn that makes an investment go south. So, if you are either a victim of fraud or an investment manager who has been falsely accused, either with criminal charges or civil lawsuits, consult with our firm immediately. We will study the records, subpoena information and work to sort out all the facts.