by John Darer CLU ChFC CSSC RSP
In those heady days of yore New Yorkers brandished their Cosmopolitans with swizzle sticks. Now some appear to have got the swindle stick from "Cosmo".
That's alleged Ponzi swindler Nicholas Cosmo who convinced 6,000 clients to put close to $400 million into ironically named Agape World, which promised ridiculously high interest payments for what were touted as commercial "bridge loans". Now they appear to be "bridges to nowhere".
It has come to light through various news reports that Cosmo had a felony fraud conviction in 1999 which his clients were unaware of. The New York Post reports on Janaury 27, 2009 (p19) that investors were not put off when Cosmo provided no paperwork to back up the investments.
I mean look at what the Post reports:
Retiree Alice Rosenberg and her husband put $1MM with this chap. Purportedly another Long Island woman got 200 now "agape" friends into the scheme. Lourdes Ferrara put her $50,000 life savings with Agape for "5% a month".
All this on the back of another classic New York Post headline about a tragic $7 million Madoff victim "She had it made, now she's maid".
Let's just hope there are no tort victims who got the Cosmo swindle stick.
Lessons to be learned:
1. There's only one time of year to put all your eggs in one basket
2. You've heard of "show me the money". How about "show me the paperwork"? How about "show me your license" ? How about reading the paperwork and even having it independently reviewed?
3. Retirees, you are often targeted by financial scammers. Keep your guard up. Protect your life savings.
4. There is a reason why the sale of financial products and securities requires a license.
5. There are independent professional credentials and certification programs, the certificants of which are easily verifiable. Use experienced professionals who possess these credentials.
6. Some of those investments the victims probably considered too boring ARE STILL PAYING!