Financial Fraud Case: Nicholas Cosmo And Bridge Loan

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Register to read the introduction… “In 1997, after Cosmo became a licensed stockbroker, he was arrested and later pleaded guilty to mail fraud related to a stock investment scheme. He was sentenced in 1999 to 21 months in prison and ordered to pay restitution of $177,000 plus interest and to undergo therapy for gambling. His broker's license was revoked in 2000 and he made restitution payments of $11,000, records show” (Amon, Dymski, Icantalupo, Maier, 2007). …show more content…
was an investment firm, specializing in commercial bridge loans, founded by Nicholas Cosmo in 2003. On the surface Agape, similar to other fraudulent companies, seemed quite legitimate. The company claimed to broker short term bridge loans for commercial real estate developers who were willing to pay above market return to investors. By definition, a bridge loan is a short-term loan that is used until a person or company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing immediate cash flow. The loans are short-term (up to one year) with relatively high interest rates and are backed by some form of collateral such as real estate or inventory (“Bridge Loan”, n.d.). In the case of Agape World, Inc. the bridge loan was nothing more than a clever twist to a classic “Ponzi” scheme. Convincingly, even the famed illusionist Harry Houdini would have been impressed with Mr. Cosmo’s deceptive skills. Cleverly, the bridge loan angle to the Agape “Ponzi” scheme negated the need for Nicholas Cosmo to have a successful track record of investing similar to other investment

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