Securities Fraud Scam Stole $179 Million
Four former account representatives of the New York-based companies Agape World Inc. and Agape Merchant Advance have been hit with securities fraud charges that allege they led a “massive” Ponzi scheme that defrauded investors out of $179 million.
A Central Islip, NY court recently unsealed the criminal complaint that contains securities fraud charges relating to the operation of a Ponzi scheme against Jason Keryc, Anthony Massaro, Anthony Ciccone, and Diane Kaylor. The charges allege that between October 2003 and January 2009, all four defendants solicited investors and obtaining hundreds of millions of dollars in funding by misleading them in a number of ways:
- Assuring investors that investments would be used only to fund specific, short-term, secured bridge loans to commercial borrowers or to make short-term loans to small businesses
- Promising investors unusually high rates of returns on their investments
- Representing that investing in either Agape or AMA carried little or no risk of loss.
The defendants allegedly raised significantly more money than was needed for the loans, but still lied to investors as they reiterated that their money would only be used to fund only a particular loan. Investors were never told that approximately $100 million of their money was used to trade high risk futures and commodities.
Each of the defendants also received sizable commissions for their part in the scheme that ranged from $4.75 million to $16 million.
Over time, investors began to express concern over their investments, the defendants took their scheme one step further and offered a fake insurance policy that they promised would let the investors own a portion of liens that purportedly secured repayment of bridge loans that had been involved in the initial investment. The defendants were able to scam investors out of an additional $865,000 through the insurance scam.
“These defendants allegedly convinced thousands of men and women to part with their hard-earned money for what was supposed to be a safe investment,” said U.S. Attorney Lynch. “In reality, the investors were duped into investing in a classic Ponzi scheme. And when concerns were raised, the defendants only deepened the deception by selling bogus ‘insurance’ against the victimization that had already occurred.
Approximately 5,000 individuals invested a total of more than $400 million in both companies. While some investors received a return on their investment, approximately 4,100 investors ended up losing a combined $179 million. Each defendant faces up to 20 years in prison.