Man jailed for $400 mn Ponzi scheme in US

Cosmo had pleaded guilty in October 2010 to mail and wire fraud in connection with the operation of the Ponzi scheme over a five-year period,federal prosecutors said. He was ordered to forfeit USD 409.3 million in assets.

“Those who lie and steal from the investing public are on notice that they face severe penalties,” US Attorney Loretta Lynch said in a statement,adding Cosmo’s actions had “crushed the hopes and dreams of everyday citizens.”

“We stand committed to ensuring that our markets operate fairly and honestly,and we will aggressively investigate and prosecute those who fraudulently enrich themselves at the expense of investors,” she said.

Cosmo told his clients the money would be invested in short-term commercial loans,prosecutors said. Instead,he traded futures and commodities without telling his investors,and paid early investors using new investors’ money.

Several victims testified at the sentencing hearing in federal court in Central Islip,New York. Many of them said they had lost their family’s life savings.

The case bore similarities to that of Wall Street fraudster Bernard Madoff,who was sentenced in June 2009 to 150 years in prison after taking tens of billions of dollars from clients over a period of more than 20 years.