Michael Amon

L.I. Ponzi scheme involved local ballfield

Posted in Newsday, Uncategorized by michaelamon on November 24, 2009


By Michael Amon
Feb. 9, 2009 p. A8
Last May, a youth baseball league offered a complete makeover of a Seaford baseball field owned by the Levittown school district — new artificial turf, a T-ball field, fences, light towers and bleachers. All at no cost to taxpayers.

“It was kind of a no-brainer,” said district superintendent Herman Sirois. The improvements, proposed by the Levittown Seaford Wantagh Athletic Association, and carried out before last summer’s season, were unanimously approved as a gift by the Board of Education on May 13, meeting minutes show.

Now those field improvements are part of a federal probe into what investigators say was a $370-million Ponzi scheme run by Nicholas Cosmo, the president of Hauppauge investment firm Agape World Inc., who was a league board member. Sirois, in an interview last week, said federal officials have not contacted the district, but he would forward all documents regarding the improvements to prosecutors investigating the case.

Cosmo, who is being held on a federal mail-fraud charge in the alleged scam, spent or lost at least $135 million of investors’ money, federal authorities said, including about $300,000 for operating expenses and capital improvements for a youth baseball league he founded. That league, National Tournament Baseball, is the travel part of the Levittown Seaford Wantagh Athletic Association’s baseball program, according to the league Web site.

Federal authorities say Agape purported to be a high-interest lender but in fact made few loans and paid investors with funds from new investors.

Richard Barry, the Levittown Seaford Wantagh Athletic Association’s board vice president, proposed the improvements, Sirois said. Barry, who also is Agape’s executive vice president, has not been accused of any wrongdoing.

Representatives for the U.S. Postal Inspection Service, which has filed the charge against Cosmo, and federal prosecutors declined to comment.

Barry did not respond to messages.

Cosmo’s attorneys declined to comment. Cosmo remains in jail until prosecutors and his attorneys agree upon a bail package. No new court date has been scheduled.

An unsigned statement on the athletic association Web site titled “An urgent message to all members” said it was severing ties to Cosmo. “Mr. Cosmo has been a participant and sponsor of LSWAA activities and over the past several years has donated or provided goods and services to our organization,” the statement said. “LSWAA has never been given any information which would lead the Board of Directors to question the source of these funds.”

Cosmo’s name has been removed from the association’s Web site. According to the federal complaint against him, the Seaford field had a sign citing Agape as a sponsor. The sign is no longer there.

League president Richard Danetti and other board members did not respond to messages.

Sirois said improvements were presented before the alleged Ponzi scheme was unraveled. “There was no reason for us to believe there was anything untoward,” Sirois said.

The school district doesn’t know the value of the improvements or whether they were paid for by Agape, Cosmo or the athletic association, Sirois said.

Sirois said he checked with legal counsel, who said the district probably faced no liability as Agape investors seek their money. “If the gift was accepted in good faith and there’s no cash involved . . . we don’t have anything to return,” he said.

If a link is found between the money used for field improvements and the alleged Ponzi scheme, investors could sue the school district for the fair market value of the improvements, arguing the district “obtained value they didn’t pay for,” said David Gehn, a Manhattan securities attorney with experience investigating Ponzi schemes.

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: