Following fast on the heels of the recent Bernard Madoff Ponzi scheme travesty, the President and founder of a Hauppauge, Long Island-based investment firm turned himself in to authorities late last evening after a warrant was issued for his arrest. Nicholas Cosmo, founder of Agape World Inc., is alleged to have actually been running a Ponzi scheme, bilking numerous investors across Long Island and the United States of their life savings.

Angry investors and authorities suspect that Agape World, which offered clients the chance to invest in bridge loans for a high rate of return in a relatively short period of time, was actually a Ponzi scheme.

Cosmo denies the allegations and promises that investors will receive their principal investment back eventually, citing that payouts had been delayed because several bridge loans had defaulted due to a troubled economy. Following the raid of Agape World offices by authorities and Cosmo’s subsequent arrest later that evening, many investors remain unconvinced, feeling only hopelessness and despair. Whereas Bernard Madoff focused mainly on high-profile investors, Agape World targeted everyone indiscriminately, with the majority of their clients comprised of blue-collar workers and middle class families that certainly can’t afford to lose one cent of their hard-earned money.

Last year, Kessler International, an investigative firm specializing in forensic accounting, computer forensics and corporate investigation, investigated Agape World and found that the bridge loan operation exhibited numerous red flags often associated with Ponzi schemes. Michael G. Kessler, CEO and founder of Kessler International, forwarded the findings to the FBI and other law enforcement agencies in August 2008. Shortly thereafter, the FBI, in conjunction with the United States Postal Inspection Service, launched its own investigation.

During that time, Agape World continued to operate, acquiring new investors who likely have lost their money as well. After issuing a series of press releases regarding fraudulent bridge loan operations and Ponzi schemes, Kessler International’s Long Island office began receiving calls from worried investors who had begun to scrutinize Agape World more closely.

Within recent months, payout dates for various bridge loans had been continuously extended, a sign often foretelling the collapse of a Ponzi scheme. Calls to Kessler International increased as investors grew increasingly suspicious and had grown tired of hearing excuses or receiving no information whatsoever regarding their investments. Last week, Cosmo finally announced that no payouts would be forthcoming, as three commercial developers involved in various bridge loans had defaulted, and motions were being taken to foreclose on the properties in an effort to recover the monies.

According to forum postings on various message boards, many investors have already determined that they have fallen victim to a Ponzi scheme run by Agape World, and hold little hope of recovering their investment. Others are still clinging to a ‘wait and see’ attitude, and a small percentage still stand behind Agape World, claiming that the company is legitimate, despite Cosmo’s arrest.

“Based on banking records and additional evidence seized by the FBI and the USPIS,” Kessler said, “authorities believe that Agape World was running a Ponzi scheme that took in over $370 million from investors. I am pleased to see that the FBI and the USPIS acted quickly in this matter, and I congratulate them on a successful investigation. Hopefully justice will soon be served.”

Kessler also sympathizes with the plight of the investors and the financial troubles they may face in the coming months. “Based on the many reports we received,” he says, “it is my understanding that Agape World provided investors with very little records or documentation. I would advise everyone to hold on to everything they ever received from Agape World, and to contact the FBI and the Postal Inspectors.”

Kessler also advises that consumers need to approach investment firms such as Agape World very warily, performing their own due diligence before investing any amount. Investment opportunities in bridge loans are not usually solicited to the general public on such a broad scale. Even a little bit of research can sometimes uncover several red flags that would have prevented many consumers from making the mistake of investing in a fraudulent investment operation.

Potential investors are usually lured by brokers offering an appealing high rate of return in a short amount of time, typically 3-6 months. If the rate being offered is exceptionally better than what is currently offered in the marketplace, then the legitimacy of the deal should be questioned.

Additionally, investors should always ask all questions regarding the company and the details of the investments beforehand, requesting all details in writing. If possible, documents should be shown to a lawyer who should be able to determine the legality of the operation or at least discover questionable factors. Ponzi schemes and fraudulent bridge loan operations often rely on initial investors who have been steadily paid to convince friends and family to invest as well, in which case important details are often overlooked and many questions never asked.

Are investors encouraged to continually reinvest their profits rather than take a payout? This is a sign that the promoter is using their money to further finance the pyramid scheme. Instincts are everything. During the economic crisis blanketing our nation, it is easy for individuals to turn aside common sense in favor of blind desperation or simple greed. But common sense dictates that if a deal looks too good to be true, it probably is.

Consumers are encouraged to research the investment firm, as well as background of the founder and any brokers involved. Utilize the Internet. It’s a powerful tool, able to provide a wealth of information with just a few clicks of a mouse. Many Agape World clients have been shocked to learn that in 1999 Cosmo served 21 months in prison for defrauding investors of a securities dealer on Long Island.

For over 20 years, Kessler International has been a world leader specializing in international corporate investigations, forensic accounting, brand protection and computer forensics. Established in 1988, Kessler International's satisfied clients are comprised of an extensive and distinguished list of Fortune 500 companies, government agencies, and prestigious law firms worldwide. Its diverse staff includes former prosecutors, former law enforcement agents, attorneys, certified forensic accountants, certified fraud examiners, certified forensic computer examiners, CPAs, certified internal controls auditors, licensed investigators and researchers.

For more information on forensic accounting, computer forensics, and investment fraud, visit Kessler International’s website at www.investigation.com or call (212) 286-9100.