According to Newsday, Federal authorities are investigating a loan issued by Agape World Inc., the Hauppauge bridge loan firm that federal investigators say was a $370-million Ponzi scheme, to its own company president Nicholas Cosmo, who used it to purchase a $3.5 million indoor youth sports facility.
"We are aware of it," said Al Weissmann, a spokesman for the U.S. Postal Inspection Service. Asked if it was part of the criminal probe of Cosmo, he said: "I would say it is."
The facility at 114 Parkway Dr. South in Hauppauge (Long Island, New York) opened for just one day last Saturday and was then shut down within hours by Smithtown fire marshals because it lacked a public assembly permit, town officials said.
Now, with the facility effectively closed and Cosmo in jail on a mail fraud charge, winter soccer, football, youth baseball and lacrosse seasons for thousands of Long Island children have been canceled or disrupted, league officials said. To many involved, the facility -- called National Tournament Athletic Center and which one league official called "the Cadillac of indoor sports space on Long Island" -- represents more fallout from the alleged Ponzi scheme.
The Agape World Inc. and Agape Merchant Advance billed themselves bridge loan lenders but federal authorities said last week the companies actually made few loans. Instead, the companies paid dividends to investors with money from new investors, a classic Ponzi scheme, authorities said.
Without getting into the specifics, the issue in question is a loan Agape World made in March 2008 to a company called 114 Parkway Drive South LlC, according to the Agape World Web site. The site does not state that Cosmo owned the Parkway Drive South company, the amount of the loan or the purpose of the purchase.
Michael Kessler, a private detective hired by investors to investigate Agape World, said the loan to Parkway Drive South was noticed by investors. "My clients thought it should have been disclosed as a non-arm's-length transaction," he said.
Is anyone surprised that these things continue to happen?
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