Agape World Broker Convicted In $147M Ponzi Scheme, Sentenced To Nine Years In Prison

A financial broker from Long Island has been sentenced to 9 years in prison and ordered by the court to pay back investors nearly $180 million after being convicted in $147 million Ponzi scheme.

According to Newsday reports, “Jason Keryc was sentenced in federal court Wednesday in Central Islip to serve nine years in prison and three years of supervised release.”

Keryc was an account representative between 2005 and 2009 at Nicholas Cosmo’s Agape World. He has been identified as the most prolific broker in what has been labeled as the biggest ever Ponzi scheme in Long Island.

Keryc was found guilty of fraud and conspiracy back in April for his role in a Ponzi scheme while he was working for an investment firm based in Hauppauge that conned thousands of investors out of $147 million.

He was found guilty on 10 counts of mail, wire, conspiracy, and securities fraud. Agape World scheme reportedly claimed more than 3,800 victims.

According to the federal prosecutors, Keryc appropriated nearly $9 million in the arrangement, while convincing investors their funds were safe in high interest short-term business loans.

The prosecution said that Keryc had worked as an Agape World broker since October, 2003, and he knew he was misleading the investors by the middle of 2006. He presented the counterfeit investments as “99 percent risk free,” and convinced his clients of Agape World’s positive track record as a bridge-loan lender.

Although the prosecutors said Keryc helped bring in around $611 million into Agape World, actually only $22 million was actually lent to borrowers. The rest went to pay interest to other investors, pay brokers’ commissions, and fuel Keryc’s boss Nicholas Cosmo’s taste for gambling on futures trading.

Keryc is only the second person to be sentenced in the Agape World case. Keryc’s boss Cosmo was detained in January, 2009, for stage-managing the fraud. Cosmo is now serving a 25-year sentence at the Fort Dix correctional facility in New Jersey after pleading guilty to mail and wire fraud in October, 2010.

While the other seven defendants linked with the massive Ponzi had already pleaded guilty to the charges, only Keryc along with former Agape employee, Diane Kaylor, chose to go to trial. Kaylor was found guilty, along with Keryc, last year. She is scheduled to be sentenced on April 8.

Assistant U.S. Attorney Christopher Cafaro had suggested a prison sentence of 25 years while federal sentencing guidelines for Keryc’s crime ranged from 30 years’ term to life sentence.

Keryc has already spent his last 10 months in East Meadow’s Nassau County Jail. He will likely be locked up at upstate Otisville’s federal prison, under the appeal of his attorney John Carman.

While pleading for lenience, Keryc was dressed in an orange prisoner jumpsuit and addressed the court in Central Islip and accepted his role in deceiving investors. He admitted of having made “a terrible mistake” while stressing he’s a good person otherwise.

“What happened at Agape World was nothing short of a tragedy and all of this happened on my watch,” Keryc said. “I honestly believe I’m a good person who made a terrible mistake.”

Although United States still ranks high in the control of financial crime according to the report by Aperio Intelligence, financial crimes such as money laundering, mortgage fraud, tax evasion, and embezzlement have been increasing lately at an alarming rate.

Ponzi in 1920 in Boston
(Image via Wikipedia)

A Ponzi scheme is a deceitful investment operation where the operators pay returns to their investors from new capital paid by new investors, rather than from their own profits. The operators of such schemes usually tempt new stakeholders by offering higher returns than other investments.

The scheme is named after Charles Ponzi, who became infamous for using the technique to take large amount of money in 1920.

[Photo by John Dunn/AP Photo]