Salesman Gets 7-Year Prison Sentence For Role In $370 Million Ponzi Scheme
A New York man who took in nearly $9 million in commissions for soliciting investors for a $370 million Ponzi scheme has been sentenced to a nine-year prison term for his role in the fraud. Jason Keryc, of Wantaugh, New York, received the sentence from U.S. District Judge Denis R. Hurley after a federal jury convicted Keryc on charges of securities fraud, conspiracy, mail fraud, and wire fraud for his role in pitching investments for Agape World, Inc. ("Agape"). Keryc is one of five former Agape sales agents charged for his role in the massive Ponzi scheme masterminded by Agape founder Nicholas Cosmo. In addition to his prison sentence, Keryc was also ordered to pay $179 million in restitution.
Authorities arrested Cosmo in January 2009, charging him with operating a $415 million Ponzi scheme. According to authorities, Cosmo used his companies, Agape and Agape Merchant Advance LLC (collectively, Agape), to solicit investors by promising high returns purportedly derived from making private bridge loans to commercial real estate companies and builders. The scheme used a network of agents that received lucrative commissions in exchange for soliciting investors. After pleading guilty in October 2010, Cosmo received a 25-year sentence in October 2011.
After Cosmo was sentenced to prison, authorities began investigating the scheme's use of commissioned agents to attract investors. This included an assortment of false claims made to lure investors, including the safety of an investment, the intended use of investor funds, and the attractive rate of return. Authorities soon zeroed in on alleged misrepresentations and omissions made by agents in 2008 despite learning that previous bridge loans made in 2007 were either in default or on extension. Investors were also not told that approximately $100 million of investor funds were transferred to commodity trading accounts - of which $80 million was subsequently lost in commodities trading. Cosmo's sales agents were richly rewarded for their efforts; Cosmo paid more than $50 million in commissions during the scheme's existence.
Keryc was an account representative for Agape from November 2003 and January 2009. Authorities charged that, of the approximately 5,000 investors that were duped by Agape, 1,600 of those investors were solicited at the behest of Keryc or sub-brokers working at his direction. Keryc ultimately raised approximately $700 million from investors that was earmarked for specific bridge loans when, in reality, roughly $25 million was loaned to Agape's bridge loan clients from 2003 to 2009.
Previous Ponzitracker coverage of the Agape Ponzi scheme is here.
A copy of the indictment charging Keryc is below: