A former vice president and underwriter at Agape World Inc. surrendered to authorities who accuse him of participating in a $413 million Ponzi scheme at the loan company.
Richard Barry, who allegedly knew investor funds were used improperly, appeared in federal court in Central Islip, New York, today and was released on a $200,000 bond, according to Robert Nardoza, a spokesman for U.S. Attorney Loretta Lynch in Brooklyn, New York. Prosecutors obtained a warrant for his arrest yesterday, Nardoza said. Nicholas Cosmo, Agape’s owner, was arrested in the case in January 2009.
“Between October 2003 and January 2009, Agape received approximately $363 million from investors to fund specific bridge loans but only loaned approximately $25 million to its bridge-loan borrowers,” according to the arrest affidavit sworn to by Postal Inspector Richard Cinnamo. Another Agape company loaned $5 million of $50 million invested, according to Cinnamo.
U.S. District Judge Denis Hurley in Central Islip, New York, yesterday set a Jan. 10 trial date for Cosmo, who also owns Agape Merchant Advance LLC. Cosmo, who pleaded not guilty, was indicted in April 2009 for defrauding at least 6,000 investors.
Jonathan Edwards, a lawyer for Barry, didn’t return a call for comment.
Barry knew investor money Agape got was never lent to borrowers, according to the arrest affidavit. In one instance, he received a check for $35,000 after Agape raised $13 million for a loan never made for a residential development project in Missouri, according to the affidavit.
Company in Bankruptcy
Agape, which was put into involuntary bankruptcy in February 2009, had offices in Hauppauge, Maspeth and Jackson Heights, New York, according to the affidavit.
In October, Hurley ordered Cosmo to jail for violating court orders that barred him from using a computer and for lying to a court official overseeing his release on $1.25 million bail. If convicted, he faces as much as 30 years in prison.
The criminal case is U.S. v. Cosmo, 09-cr-002255, U.S. District Court, Eastern District of New York (Central Islip). The bankruptcy case is In Re Agape World Inc., 8-09-70660, U.S. Bankruptcy Court, Eastern District of New York (Central Islip).