Four brokers who are accused of helping to rip off many middle- and working-class investors on Long Island in a large Ponzi scheme were arrested Wednesday by U.S. postal Inspectors and FBI agents.
Investigators said the four helped convicted swindler Nicholas Cosmo run a Ponzi scheme where investors lost nearly $200 million.
Cosmo was dubbed the "mini-Madoff" because his Ponzi scheme collapsed a short time after Bernie Madoff's $60 billion fraud came to light.
The four suspects were expected to be arraigned later Wednesday.
All four are charged with helping Cosmo and his Agape World Inc. solicit cash from unsuspecting investors. They allegedly made false promises that the investments were low-risk, and were merely bridge loans while high interest would be paid in return.
Victims of the alleged scheme include teachers, immigrant workers and soldiers who were serving overseas in Iraq and Afghanistan. It went on from 2003 to 2009, authorities said.
U.S. Attorney Loretta Lynch said in a statement that the defendants "allegedly convinced thousands of men and women to part with their hard-earned money for what was supposed to be a safe investment."
One of the victims, Queens native Paul Priore, told NBC New York one of the suspects, Anthony Massaro, courted his family and promised an 8 percent return for their investment in Agape World Inc.
"They were very convincing," said Priore. "The whole thing looked great on paper."
Priore, who used to work for a cleaning company, invested $15,000 over four to five years. Losing the money "changed our life drastically," he said. "We're still struggling."
The suspects face securities fraud-related counts that carry up to 20 years in prison, if they are convicted.
"I think these people should have been arrested since day one, and they should have been convicted," Priore said.
An attorney for Massaro, who is in Florida, told NBC New York his client will plead not guilty. The charges were surprising, the attorney said, because Massaro had been cooperating for years with the government in its case against Cosmo.
Cosmo bet on futures with the investors' money and lost much of it. He used other cash for cars and vacations as well as paying his workers huge commissions.
He used new investor money to cover losses and expenses and some payments to earlier investors.
Cosmo was convicted in the Ponzi scheme last year.
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