Jul 30, 2014
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Wantagh Residents Charged in $415M Ponzi Scheme

SEC claims these sales agents falsely promised investors high returns on investments.

Wantagh Residents Charged in $415M Ponzi Scheme

Three Wantagh residents are among 14 sales agents charged by the Securities and Exchange Commission for allegedly misleding investors and illegally selling securities for a Long Island-based investment firm at the center of a $415 million Ponzi scheme.

According to a release issued by the SEC:

The SEC alleges that the sales agents — which include four sets of siblings — falsely promised investor returns as high as 12 to 14 percent in several weeks when they sold investments offered by Agape World Inc. They also misled investors to believe that only 1 percent of their principal was at risk. The Agape securities they peddled were actually non-existent, and investors were merely lured into a Ponzi scheme where earlier investors were paid with new investor funds. The sales agents turned a blind eye to red flags of fraud and sold the investments without hesitation, receiving more than $52 million in commissions and payments out of investor funds. None of these sales agents were registered with the SEC to sell securities, nor were they associated with a registered broker or dealer. Agape also was not registered with the SEC.

According to the SEC’s complaint, more than 5,000 investors nationwide were impacted by the scheme that lasted from 2005 to January 2009, when Agape’s president and organizer of the scheme Nicholas J. Cosmo was arrested. He was later sentenced to 300 months in prison and ordered to pay more than $179 million in restitution.

Among those charged include:

  • Brothers of Wantagh, and Michael D. Keryc of Baldwin, Jason Keryc offered and sold Agape securities to at least 1,617 investors and received at least $16 million in commissions and payments. He also paid sub-brokers, including his brother, at least $7.4 million to sell Agape securities for him. Michael Keryc offered and sold Agape securities to at least 177 investors and received more than $1 million in commissions and payments. (Keryc was previously arrested in a criminal complaint charging him with conspiracy to commit mail fraud based on his conduct as Agape sales agents.)
  • Siblings Martin C. Hartmann III of Massapequa, and Laura Ann Tordy of Wantagh, Hartmann enlisted his sister in his sales effort while he worked as a sub-broker for Jason Keryc. Hartmann and Tordy offered and sold Agape securities to at least 441 investors and received more than $3.5 million in commissions and payments.
  • Ronald R. Roaldsen, Jr. of Wantagh, who worked as a sub-broker for Keryc. Roaldsen offered and sold Agape securities to at least 159 investors and received more than $600,000 in commissions and payments.

(Editor's Note: 8:44 p.m. It was originally reported that the individuals were arrested. In fact, they were not arrested; they have been civilly charged by the SEC. Patch regrets the error.)

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