Nicholas Cosmo, dubbed “Mini-Madoff” by the media because of his arrest weeks after Bernie Madoff, was sentenced to 25 years in federal prison and ordered to pay $179 million in restitution. Cosmo was arrested in January 2009 and pled guilty to wire and mail fraud in 2010.
What’s tragic about this fraud in particular is that Cosmo’s 4,000 victims mostly included blue-collar workers include teachers, police officers, firefighters, nurses and construction workers many of which lost their life savings.
As reported in Bloomberg, U.S. Attorney Loretta Lynch in Brooklyn said, “Those who lie and steal from the investing public are on notice that they face severe penalties…As recounted today in court by several of his victims, the defendant’s actions crushed the hopes and dreams of everyday citizens.”
Even more tragic is that fact that most of Cosmo’s victims could have possibly avoided the scheme if they had taken the time to do their homework. As we have chronicled previously, Cosmo served jail time more than 10 years earlier for a scheme in which he stole more than $150,000 from his clients.
In addition to being banned from any NASD member in any capacity, court records showed that part of his 1999 sentencing required Cosmo to seek a “facility that offers an intensive gambling therapy,” an unusual request.
During his sentencing hearing on Friday, it was again revealed that Cosmo “had a serious gambling problem since high school.”
History has certainly repeated itself. Mr. Cosmo’s scheme is a prime example of why analyzing a person’s past behaviors can help you can help predict the future.