1 00:00:00,000 --> 00:00:02,720 ...turns on booming real estate opportunities. 2 00:00:03,080 --> 00:00:07,560 His victims are cops and teachers, hairdressers and builders. 3 00:00:07,940 --> 00:00:12,000 We had confidence in him, and we were convinced that this was legitimate. 4 00:00:12,460 --> 00:00:18,540 So I invested my IRA, $130 ,000, my entire life savings. 5 00:00:19,400 --> 00:00:25,960 You're making money, you become complacent, you become comfortable, and 6 00:00:25,960 --> 00:00:26,960 when you get hurt. 7 00:00:26,990 --> 00:00:31,310 Nicholas Cosmo brings white -collar crime to blue -collar America. 8 00:00:31,930 --> 00:00:35,970 He just took all my life savings and squandered it. 9 00:00:36,490 --> 00:00:39,830 Bilking his victims out of $400 million. 10 00:00:40,470 --> 00:00:47,390 One greedy scoundrel was able to destroy the lives of 4 ,000 people. Their 11 00:00:47,390 --> 00:00:51,690 hopes, their dreams, taken away, all because of his greed. 12 00:01:06,160 --> 00:01:12,240 On January 26, 2009, federal agents raid the headquarters of Long Island money 13 00:01:12,240 --> 00:01:16,780 lending firm Agape World, Inc. on suspicions of fraud. 14 00:01:18,720 --> 00:01:24,360 Meanwhile, the company's president and founder, 37 -year -old Nicholas Cosmo, 15 00:01:24,600 --> 00:01:29,420 slips out the back door and flees to Manhattan to his attorney's office. 16 00:01:30,160 --> 00:01:35,060 Later that night, Cosmo takes a commuter train back to Long Island with his 17 00:01:35,060 --> 00:01:38,850 lawyer. and surrenders to U .S. Postal Inspectors. 18 00:01:40,110 --> 00:01:44,050 He is charged with 32 counts of mail and wire fraud. 19 00:01:45,510 --> 00:01:49,690 WNBC's chief investigative reporter Jonathan Deenst is on hand to catch a 20 00:01:49,690 --> 00:01:52,770 glimpse of New York's latest accused fraudster. 21 00:01:53,090 --> 00:01:57,670 Who is this guy? No one had ever heard of him before. And who is this guy who 22 00:01:57,670 --> 00:02:02,330 allegedly took part in a $400 million fraud? Who is he? 23 00:02:05,610 --> 00:02:10,050 The story begins in suburban Wontar, New York, on Long Island. 24 00:02:10,750 --> 00:02:17,130 Here, in a blue -collar town, in a blue -collar family, Nicholas Cosmo is born 25 00:02:17,130 --> 00:02:18,130 and raised. 26 00:02:18,850 --> 00:02:23,750 Cosmo talks of his salt -of -the -earth family in this exclusive telephone 27 00:02:23,750 --> 00:02:25,510 interview with American Greed. 28 00:02:25,830 --> 00:02:31,690 I grew up in a classic, structured, strict family. 29 00:02:32,490 --> 00:02:34,910 Just a very loving family, I guess you could say. 30 00:02:35,690 --> 00:02:42,450 Nick Cosmo may end up being a black sheep, but in his youth, he's the pride 31 00:02:42,450 --> 00:02:45,270 Wontaw, a hometown kid on the rise. 32 00:02:46,250 --> 00:02:50,470 Reporter Dave Wenzelberg covers Cosmo for the Long Island Business News. 33 00:02:50,950 --> 00:02:53,310 He's got so smooth, so convincing. 34 00:02:53,990 --> 00:02:56,150 Cosmo was very involved in sports. 35 00:02:56,780 --> 00:02:58,740 He played soccer, he played baseball. 36 00:02:59,280 --> 00:03:03,120 Baseball was his ticket to college. He got a scholarship to St. John's, which 37 00:03:03,120 --> 00:03:05,140 a great baseball program here in New York City. 38 00:03:05,840 --> 00:03:09,960 But playing sports isn't enough for the ultra -competitive Cosmo. 39 00:03:10,500 --> 00:03:16,380 As a teen, he secretly starts betting and is soon hooked on the rush of risky 40 00:03:16,380 --> 00:03:17,380 sports gambling. 41 00:03:18,280 --> 00:03:21,940 Unfortunately, he had a gambling Jones very early on. He went to his first 42 00:03:21,940 --> 00:03:24,160 Gambling Anonymous meeting while he was still in high school. 43 00:03:24,760 --> 00:03:28,880 So it was apparent that he would have a problem with gambling for a long time. 44 00:03:29,840 --> 00:03:31,400 I know I have a gambling addiction. 45 00:03:32,720 --> 00:03:35,240 It was always something very difficult for me to control. 46 00:03:36,820 --> 00:03:42,920 In 1993, Cosmo is drafted by the Ohio Valley Redcoats minor league baseball 47 00:03:42,920 --> 00:03:45,780 team. And he has a shot at the big leagues. 48 00:03:46,540 --> 00:03:48,920 But after one season, he is cut. 49 00:03:50,240 --> 00:03:51,780 I'm only 5 '8". 50 00:03:52,200 --> 00:03:55,440 And, you know, that always is a strike against you in baseball. 51 00:03:56,400 --> 00:03:58,280 You have to be exceptional, exceptional. 52 00:03:58,520 --> 00:03:59,520 And I wasn't that. 53 00:03:59,820 --> 00:04:05,260 And so the unexceptional baseball player and closet gambling addict finds 54 00:04:05,260 --> 00:04:07,000 himself in need of a career. 55 00:04:09,000 --> 00:04:14,120 He decided to go at that time into being a stockbroker. And he thought that was 56 00:04:14,120 --> 00:04:17,180 the best way to make money fast. 57 00:04:18,510 --> 00:04:25,190 In 1993, Cosmo gets his Series 7 license and finds a job as an entry -level 58 00:04:25,190 --> 00:04:31,050 stockbroker. In the mid -90s, Long Island is the epicenter of the so 59 00:04:31,050 --> 00:04:36,250 boiler room brokerage, made famous in the feature film of the same name. 60 00:04:39,250 --> 00:04:46,150 He hooked up with an outfit here on Long Island that was one of the models for 61 00:04:46,150 --> 00:04:47,470 a boiler room movie. 62 00:04:47,930 --> 00:04:49,870 It was that kind of operation. 63 00:04:50,410 --> 00:04:55,170 Boiler rooms are startup firms that use young brokers to make high -pressure 64 00:04:55,170 --> 00:04:57,870 cold calls to unsophisticated investors. 65 00:04:58,730 --> 00:05:04,050 They just hammered people on the phone looking for anybody with money. They 66 00:05:04,050 --> 00:05:07,450 could be retirees. They could be people with 401ks or whatever. 67 00:05:08,130 --> 00:05:09,730 Cosmo liked the action. 68 00:05:09,950 --> 00:05:14,470 He was a gambler, so he liked the idea of making stock trades. 69 00:05:15,130 --> 00:05:17,050 Cosmo is learning the ropes. 70 00:05:17,630 --> 00:05:22,490 learning how to talk people out of their money, selling penny stocks and other 71 00:05:22,490 --> 00:05:23,850 high -risk investments. 72 00:05:24,210 --> 00:05:28,370 But on the side, he's also raising the stakes on his gambling habit. 73 00:05:29,290 --> 00:05:35,890 I worked with 200, 300 men, and we were all in our 20s, and guys were making a 74 00:05:35,890 --> 00:05:39,350 lot of money. The sports gambling got out of control. 75 00:05:40,170 --> 00:05:45,010 According to Cosmo, he's coming up on the losing end of too many bets. 76 00:05:45,580 --> 00:05:51,240 And although he won't name names, his gambling creditors are not the nicest 77 00:05:51,240 --> 00:05:52,240 in town. 78 00:05:52,500 --> 00:05:54,220 You know, you can use your imagination. 79 00:05:54,880 --> 00:06:01,300 You know, you gamble with people that expect to get paid and will do what they 80 00:06:01,300 --> 00:06:02,300 can to collect that money. 81 00:06:04,000 --> 00:06:09,620 Cosmo has a girlfriend and a baby son to support, and a nasty gambling habit is 82 00:06:09,620 --> 00:06:11,080 eating up much of his salary. 83 00:06:11,640 --> 00:06:15,600 until Cosmo comes up with a scheme to pay off his bookies. 84 00:06:16,000 --> 00:06:21,220 He took money from about 10 clients and told them he was investing it in a 85 00:06:21,220 --> 00:06:26,020 certain place when he was paying back his own gambling debts. And he took them 86 00:06:26,020 --> 00:06:28,360 for a tune of about $177 ,000. 87 00:06:29,200 --> 00:06:34,380 In this exclusive telephone interview, Nicholas Cosmo talks about his crime for 88 00:06:34,380 --> 00:06:36,880 the first time with American Greed. 89 00:06:37,300 --> 00:06:40,400 I said that I worked for a company called Charles Schwab, which I did not. 90 00:06:40,990 --> 00:06:44,490 You know, I basically told these people that I was going to manage their money. 91 00:06:45,030 --> 00:06:49,570 And, you know, I bought them options. I lost money in the market with them. 92 00:06:50,110 --> 00:06:53,790 And at the same time, I was gambling and paying my gambling debts. 93 00:06:56,050 --> 00:07:01,510 Cosmo secretly transfers his client's accounts to his own company and quickly 94 00:07:01,510 --> 00:07:06,830 loses or gives away $177 ,000 of their money. 95 00:07:07,630 --> 00:07:12,210 When one investor is not able to withdraw some of his principal, he 96 00:07:12,210 --> 00:07:13,590 Cosmo to the FBI. 97 00:07:15,350 --> 00:07:20,750 In December 1997, Nicholas Cosmo is arrested on fraud charges. 98 00:07:21,730 --> 00:07:27,310 He pleads guilty to one count of mail fraud and is barred from ever trading in 99 00:07:27,310 --> 00:07:28,310 securities again. 100 00:07:28,770 --> 00:07:34,630 He's ordered to pay his restitution and is sent to live out his 21 -month 101 00:07:34,630 --> 00:07:35,890 sentence here. 102 00:07:36,590 --> 00:07:41,190 at Allenwood Federal Correctional Facility in Pennsylvania, a place also 103 00:07:41,190 --> 00:07:43,690 referred to as Club Fed. 104 00:07:44,290 --> 00:07:47,370 But there were no fences, no bars, no handcuffs. 105 00:07:47,590 --> 00:07:49,970 I should have learned my lesson back then, of course. 106 00:07:51,090 --> 00:07:54,510 But that wasn't prison. 107 00:07:55,710 --> 00:07:59,350 It appears that Cosmo does not learn his lesson. 108 00:07:59,650 --> 00:08:06,000 In August 2000, the same month he's released from prison, Cosmo establishes 109 00:08:06,000 --> 00:08:07,000 new corporation. 110 00:08:07,540 --> 00:08:11,140 He calls it Agape World Inc. 111 00:08:11,700 --> 00:08:17,180 Agape is a very popular word in the Bible. It means perfect love. 112 00:08:18,060 --> 00:08:24,980 I always believed in perfect love. I am, I guess to say, a romantic at heart. 113 00:08:25,600 --> 00:08:31,880 Cosmo wanted to have a name that really exuded trust and a benign type of 114 00:08:31,880 --> 00:08:33,020 name. 115 00:08:34,280 --> 00:08:39,440 No longer allowed to trade securities, Cosmo's company moves in a different 116 00:08:39,440 --> 00:08:41,600 direction. Real estate loans. 117 00:08:43,000 --> 00:08:46,280 In the early 2000s, the U .S. economy is booming. 118 00:08:46,860 --> 00:08:49,920 Real estate has never seemed a safer bet. 119 00:08:50,140 --> 00:08:52,800 And everyone wants a piece of the action. 120 00:08:54,380 --> 00:08:59,260 Michael Kessler is a New York private investigator who digs into Cosmo's 121 00:08:59,260 --> 00:09:05,930 background. Agape World was basically and simply promoting bridge loans. And a 122 00:09:05,930 --> 00:09:10,150 bridge loan is when you need to borrow money because you're going to be selling 123 00:09:10,150 --> 00:09:13,390 off one piece of property and buying another piece of property. 124 00:09:14,850 --> 00:09:19,830 Agape's plan is to supply short -term bridge loans for big real estate 125 00:09:19,830 --> 00:09:23,250 developments, charging more than 20 % interest. 126 00:09:23,630 --> 00:09:28,450 When the loans come due, investors would be rewarded with high percentage 127 00:09:28,450 --> 00:09:29,450 returns. 128 00:09:29,720 --> 00:09:32,780 You know, I saw the potential, you know, in the bridge loan market. 129 00:09:33,820 --> 00:09:37,800 Borrowing money was very easy, and the real estate market was really where to 130 00:09:37,800 --> 00:09:38,800 be. 131 00:09:39,140 --> 00:09:44,920 In order to lure in investors, Cosmo assembles a ragtag crew of salespeople 132 00:09:44,920 --> 00:09:51,700 calls brokers, made up mostly of friends and even ex -cons he befriended in 133 00:09:51,700 --> 00:09:53,800 prison. The staff that he had... 134 00:09:55,210 --> 00:09:58,650 We're not the educated financial people that you would give millions of dollars 135 00:09:58,650 --> 00:10:02,830 to in order to invest your money. These were people, a lot of them had served 136 00:10:02,830 --> 00:10:07,930 prison times themselves, and some of them couldn't chew gum and walk at the 137 00:10:07,930 --> 00:10:08,930 time. 138 00:10:10,490 --> 00:10:16,270 But in this confident climate, Cosmo's inexperienced brokers have no trouble 139 00:10:16,270 --> 00:10:18,250 selling a supposed sure thing. 140 00:10:18,780 --> 00:10:22,940 So these guys were out there running and pitching and word of mouth spread. And 141 00:10:22,940 --> 00:10:27,660 increasingly, these unsuspecting investors went and believed the 142 00:10:27,840 --> 00:10:30,080 believed the website, believed what they were being told. 143 00:10:35,180 --> 00:10:39,500 A friend of mine who was in the mortgage business actually got me involved and 144 00:10:39,500 --> 00:10:43,320 talked about this investment that he was in. And he was getting very good 145 00:10:43,320 --> 00:10:45,920 returns, even more than he originally thought. 146 00:10:47,050 --> 00:10:52,250 For Long Island Special Education Administrator Kevin Milano, the 147 00:10:52,250 --> 00:10:53,470 appears sound. 148 00:10:53,750 --> 00:10:57,830 I did my research, looked into it, like I do with all my investments. I think 149 00:10:57,830 --> 00:11:01,810 I'm a pretty good investor, and then decided to delve in a little bit. 150 00:11:03,250 --> 00:11:08,010 Milano tests the waters, investing $70 ,000 to start. 151 00:11:08,390 --> 00:11:12,450 He's told he will make 14 % in 90 days. 152 00:11:13,120 --> 00:11:17,200 I got my statement back, and I had made that amount of interest over a short 153 00:11:17,200 --> 00:11:19,540 period of time, and the bridge loan came through. 154 00:11:19,900 --> 00:11:23,760 And from that point, I started to invest a little bit more and a little bit 155 00:11:23,760 --> 00:11:24,760 more. 156 00:11:24,860 --> 00:11:31,280 Within two years, he's in for $210 ,000, his entire savings, to realize his 157 00:11:31,280 --> 00:11:33,200 dream of a Florida retirement home. 158 00:11:33,940 --> 00:11:38,100 It's money he's worked for and invests wisely for 30 years. 159 00:11:39,060 --> 00:11:40,960 Milano feels secure with Agape. 160 00:11:41,520 --> 00:11:46,660 in large part because Nick Cosmo is practically a neighbor and seems like a 161 00:11:46,660 --> 00:11:47,660 trustworthy guy. 162 00:11:48,060 --> 00:11:53,780 I saw him frequently at the Little League field on weekends, fixing the 163 00:11:53,780 --> 00:11:54,960 up, teaching kids how to bat. 164 00:11:55,240 --> 00:12:00,180 He wasn't at a country club on the weekends. He didn't have a private jet. 165 00:12:00,180 --> 00:12:04,420 was pretty much living a suburban life here. 166 00:12:05,920 --> 00:12:07,500 Next on American Greed. 167 00:12:08,520 --> 00:12:12,720 Cosmo says he's loaning out hundreds of millions of dollars for real estate 168 00:12:12,720 --> 00:12:18,380 deals. So why haven't some of his supposed borrowers ever even heard of 169 00:12:18,860 --> 00:12:24,740 When I realized that this could be a scam, you know, my heart dropped. 170 00:12:35,840 --> 00:12:37,280 In 2007, 171 00:12:38,330 --> 00:12:43,210 Long Island -based Agape World, Inc. appears to be a very successful money 172 00:12:43,210 --> 00:12:44,210 -lending firm. 173 00:12:45,190 --> 00:12:51,310 Founded by 35 -year -old Nicholas Cosmo, Agape reports 10 million in profits 174 00:12:51,310 --> 00:12:52,310 that year. 175 00:12:53,510 --> 00:12:58,430 In the suburban communities of Long Island, Queens, and Staten Island, New 176 00:12:58,650 --> 00:13:04,250 thousands of working -class investors believe that Agape is a good place to 177 00:13:04,250 --> 00:13:05,250 their money. 178 00:13:05,360 --> 00:13:09,580 Word of mouth is out on the street. My neighbors can vouch for this guy. They 179 00:13:09,580 --> 00:13:11,000 say, look, I've made money with him. 180 00:13:11,560 --> 00:13:14,460 You can too. And it's a safe, sure thing. 181 00:13:15,120 --> 00:13:20,440 These were not hedge funds that we're investing with Cosmo. These were 182 00:13:20,440 --> 00:13:21,700 working people. 183 00:13:25,260 --> 00:13:32,180 My girlfriend had heard about it through her attorney, and she told me about 184 00:13:32,180 --> 00:13:33,180 it. 185 00:13:34,900 --> 00:13:40,380 64 -year -old Ellen Gabriel has been a hairdresser and cosmetician for more 186 00:13:40,380 --> 00:13:41,380 40 years. 187 00:13:41,600 --> 00:13:47,260 She is not married, has little family, and has been putting away money in an 188 00:13:47,260 --> 00:13:49,320 for most of her working life. 189 00:13:49,860 --> 00:13:54,640 Now, it seems everyone she knows is raving about Agape World. 190 00:13:55,080 --> 00:14:01,580 My girlfriend said that it was going to be about 12 % every 90 days. 191 00:14:03,020 --> 00:14:08,680 Gabriel decides to pull $30 ,000 out of her IRA and invest with Agape. 192 00:14:09,620 --> 00:14:14,100 Like her friend, Gabriel receives statements showing that her money is 193 00:14:14,220 --> 00:14:15,680 and she lets it ride. 194 00:14:16,600 --> 00:14:22,300 Then, four months later, Nick Cosmo's profile rises to a national level. 195 00:14:22,680 --> 00:14:26,120 Entrepreneur Magazine puts out a list of the 100 fastest -growing companies in 196 00:14:26,120 --> 00:14:31,340 America, and when Cosmo made that list, he used that as his ticket to 197 00:14:31,340 --> 00:14:32,340 legitimacy. 198 00:14:33,520 --> 00:14:37,960 This is the email that I got from Agape. 199 00:14:38,800 --> 00:14:43,180 Ellen Gabriel's Agape broker sends her an email about the article. 200 00:14:43,460 --> 00:14:49,000 They were absolutely glowing about the company, about Mr. Cosmo. Had a picture 201 00:14:49,000 --> 00:14:50,180 of him in the magazine. 202 00:14:50,740 --> 00:14:52,120 Went on the website. 203 00:14:52,760 --> 00:14:55,300 All kinds of information about him. 204 00:14:56,300 --> 00:14:59,060 So I invested my IRA. 205 00:14:59,940 --> 00:15:01,380 $130 ,000. 206 00:15:01,600 --> 00:15:03,080 My entire life savings. 207 00:15:05,040 --> 00:15:10,760 Gabriel isn't the only one impressed by Agape World's place on Entrepreneur 208 00:15:10,760 --> 00:15:11,760 Magazine's list. 209 00:15:12,060 --> 00:15:17,400 Within a few months of its release, Nick Cosmo is flooded with millions of 210 00:15:17,400 --> 00:15:19,380 dollars in new investor money. 211 00:15:21,080 --> 00:15:26,420 Like most investors, Dom Dicolandria learns about Agape through a friend. 212 00:15:26,990 --> 00:15:31,430 who says he's making about 14 % every 60 to 90 days. 213 00:15:32,570 --> 00:15:35,550 That's 50 to 85 % a year. 214 00:15:35,990 --> 00:15:40,390 My limited understanding at that time was that they gave bridge loans to 215 00:15:40,390 --> 00:15:43,990 businesses. And because the interest rates were so high that they were 216 00:15:43,990 --> 00:15:47,930 collecting on those loans, they were able to pay the investors high interest 217 00:15:47,930 --> 00:15:48,930 returns. 218 00:15:49,990 --> 00:15:53,830 DeColandria researches the company and likes what he sees. 219 00:15:54,350 --> 00:15:57,470 I checked the Better Business Bureau. They had no complaints. And Dun and 220 00:15:57,470 --> 00:16:01,470 Bradstreet, which gave them an A rating, you know, credit -wise. 221 00:16:02,490 --> 00:16:04,510 So I felt they gave it some credibility. 222 00:16:04,710 --> 00:16:08,250 And at that point, we basically put our life savings into it. 223 00:16:09,530 --> 00:16:14,250 For more than a year, DeColandria, along with thousands of other Agape 224 00:16:14,250 --> 00:16:17,630 investors, is riding high on his good fortune. 225 00:16:18,150 --> 00:16:23,410 It seemed to me like an opportunity that we couldn't afford to miss. 226 00:16:24,970 --> 00:16:30,070 The return on our investment could probably cause us to stop working and 227 00:16:30,070 --> 00:16:31,190 an earlier retirement. 228 00:16:31,610 --> 00:16:33,650 So that's what we were looking forward to. 229 00:16:36,130 --> 00:16:39,770 Investors are not the only one profiting from their agape deal. 230 00:16:40,410 --> 00:16:46,010 Nick Cosmo's staff of so -called brokers are bringing in millions of dollars in 231 00:16:46,010 --> 00:16:50,070 commissions, even though these brokers are made up mostly of friends, 232 00:16:50,330 --> 00:16:56,400 including... a formerly unemployed surfer and 2X con with no financial 233 00:16:56,400 --> 00:17:01,280 experience. In fact, the way the structure worked, the main brokers got 234 00:17:01,280 --> 00:17:04,760 as 18 % off of whatever they sold. 235 00:17:05,540 --> 00:17:11,480 Some of the brokers, the unemployed surfer, took in $15 million in 236 00:17:11,480 --> 00:17:14,720 alone in a very short span, in just a couple of years. 237 00:17:16,270 --> 00:17:20,630 From what we gathered in our investigation, they were spending money 238 00:17:20,630 --> 00:17:25,790 Maseratis, on Rolls Royces, houses in the Hamptons. I mean, they were living 239 00:17:25,790 --> 00:17:27,010 life of Riley, as they say. 240 00:17:27,970 --> 00:17:33,890 While his employees are living large, Nicholas Cosmo is surprisingly not 241 00:17:33,890 --> 00:17:38,410 himself a huge salary or buying million -dollar homes or yachts. 242 00:17:38,710 --> 00:17:43,910 But he is living a comfortable life, taking luxury vacations with his family. 243 00:17:44,430 --> 00:17:46,830 and buying his wife expensive jewelry. 244 00:17:48,110 --> 00:17:54,090 He also purchases this indoor sports complex on Long Island for $3 .5 million 245 00:17:54,090 --> 00:18:00,350 and refurbishes the local outdoor Little League field with lights and bleachers. 246 00:18:00,670 --> 00:18:06,010 He's betting this everyday suburban dad persona is good for business. 247 00:18:06,670 --> 00:18:11,030 Here's this guy who's, you know, out there in the community doing good works, 248 00:18:11,130 --> 00:18:13,010 good deeds, at least that's what it appeared. 249 00:18:13,310 --> 00:18:16,190 So, hey, he must be a good guy. Yeah, we'll invest with him, too. 250 00:18:17,330 --> 00:18:22,830 Next on American Greed, Nicholas Cosmo's investors are about to find out that he 251 00:18:22,830 --> 00:18:28,610 is a con artist and using their money to fuel his habit. His method of choice 252 00:18:28,610 --> 00:18:32,310 for spending the money was not big homes or big cars. 253 00:18:32,570 --> 00:18:34,250 It was gambling. 254 00:18:34,890 --> 00:18:36,790 It was his addiction that drove him. 255 00:18:49,550 --> 00:18:55,170 Lou Piccoli has been in the construction business for 25 years, building and 256 00:18:55,170 --> 00:18:57,350 renovating houses with his own hands. 257 00:18:57,990 --> 00:19:02,410 At 43 years old, a husband and father of two young children, 258 00:19:04,250 --> 00:19:08,790 to a 4 ,500 -square -foot oceanfront home on Long Island. 259 00:19:09,070 --> 00:19:15,850 This house that was my 401K, my first home, literally could fit in this 260 00:19:15,850 --> 00:19:17,830 bedroom. It was a little, little cottage. 261 00:19:18,030 --> 00:19:19,590 I fixed it up and I sold it. 262 00:19:20,050 --> 00:19:22,610 And I bought another house. I did that seven, eight times. 263 00:19:23,810 --> 00:19:29,470 The cost for a home like this is very steep, and Piccoli is working 60 and 70 264 00:19:29,470 --> 00:19:31,050 hours a week to pay for it. 265 00:19:31,710 --> 00:19:38,050 Then, in February 2007, a friend tells him about an easier way to make a 266 00:19:38,510 --> 00:19:40,250 I was on a job site. I'm a contractor. 267 00:19:40,530 --> 00:19:45,450 And he just told me he was invested with this copy of World Inc. It was 268 00:19:45,450 --> 00:19:47,650 incredible interest. 269 00:19:48,330 --> 00:19:50,350 Gave me a brief description of it. 270 00:19:51,750 --> 00:19:55,950 Piccoli sets up a meeting with the company's founder and president, 271 00:19:55,950 --> 00:19:58,230 Cosmo, and likes what he hears. 272 00:19:58,810 --> 00:20:02,770 It was building loans for people that couldn't get conventional financing, so 273 00:20:02,770 --> 00:20:07,430 they were willing to bridge the gap, pay exorbitant interest rates for short 274 00:20:07,430 --> 00:20:12,050 term, which would help them sooner or later acquire conventional financing. 275 00:20:12,530 --> 00:20:13,530 It made sense. 276 00:20:15,290 --> 00:20:20,310 Piccoli sees the investment as a way to plan for retirement and secure his 277 00:20:20,310 --> 00:20:21,310 family's future. 278 00:20:21,890 --> 00:20:27,700 At the height of the real estate bubble, he's easily able to take out $250 ,000 279 00:20:27,700 --> 00:20:29,360 in equity from his house. 280 00:20:30,260 --> 00:20:36,640 To that, he adds his own hard -earned life savings, more than $50 ,000, and 281 00:20:36,640 --> 00:20:41,140 invests it all in Agape. He quickly begins to reap the rewards. 282 00:20:41,560 --> 00:20:45,740 Now, you know, with the interest and it rolling over, I'm making $50 ,000, $60 283 00:20:45,740 --> 00:20:46,760 ,000 every other month. 284 00:20:47,520 --> 00:20:52,420 To me, to a guy who's a builder, that's, you know, that's real. 285 00:20:53,390 --> 00:20:54,390 Real good living. 286 00:20:55,270 --> 00:20:56,430 Why am I in construction? 287 00:20:58,150 --> 00:21:00,330 Piccoli decides he's in the wrong business. 288 00:21:01,110 --> 00:21:04,750 So he trades in his table saw for a pen and a calculator. 289 00:21:05,650 --> 00:21:11,270 He gets out of construction and opens a one -man financing company with the sole 290 00:21:11,270 --> 00:21:16,290 intention of getting his network of family and friends invested in a goppy 291 00:21:16,290 --> 00:21:20,010 world. From cousins that live out of state, friends. 292 00:21:21,010 --> 00:21:24,190 You know, it snowballs. Friends, parents, and brothers and sisters. 293 00:21:24,470 --> 00:21:26,330 I had roughly about 40 people. 294 00:21:27,170 --> 00:21:29,530 I was very upfront with the money I'd make with them. 295 00:21:30,230 --> 00:21:31,410 They can go through me. 296 00:21:31,650 --> 00:21:33,950 I'll take their checks up. I'll do all the running around. 297 00:21:34,190 --> 00:21:37,090 People have jobs. They don't have the time. I'll do all the legwork. 298 00:21:39,210 --> 00:21:42,650 Piccoli takes a 1 % commission from the people he brings in. 299 00:21:42,990 --> 00:21:44,690 And for the next two years... 300 00:21:44,940 --> 00:21:48,760 He makes a nice living off his new enterprise and his own investment. 301 00:21:49,120 --> 00:21:55,020 It's providing me with an opportunity not just to accelerate my goals, but 302 00:21:55,020 --> 00:21:56,640 I am. I'm the guy. 303 00:21:56,940 --> 00:22:02,080 I'm the nucleus. I brought all my friends, all my family, all these 304 00:22:02,080 --> 00:22:03,080 they're doing well. 305 00:22:03,440 --> 00:22:04,740 And you feel fantastic. 306 00:22:07,120 --> 00:22:12,360 Piccoli could never have imagined that within a year, he'd lose his job, his 307 00:22:12,360 --> 00:22:14,040 home, all of his money. 308 00:22:14,600 --> 00:22:15,700 and even his marriage. 309 00:22:16,180 --> 00:22:20,800 And more than 4 ,000 other investors would lose their shirts as well. 310 00:22:24,320 --> 00:22:28,100 July 2008 is the beginning of the end. 311 00:22:28,460 --> 00:22:34,540 In the midst of the U .S. economic meltdown, one of Nicholas Cosmo's only 312 00:22:34,540 --> 00:22:39,520 -scale investors, a New Jersey -based business owner and his partners, decide 313 00:22:39,520 --> 00:22:41,460 they want out of Agape World. 314 00:22:42,040 --> 00:22:44,880 and want more than $1 million of their money back. 315 00:22:46,280 --> 00:22:50,820 When they get no response from Cosmo, they call in New York City private 316 00:22:50,820 --> 00:22:52,760 investigator Michael Kessler. 317 00:22:53,340 --> 00:22:57,120 They were being prevented from getting this money back, saying that it wasn't 318 00:22:57,120 --> 00:23:01,740 available. They were getting the stall, and it made them feel uncomfortable that 319 00:23:01,740 --> 00:23:02,820 something might be astray. 320 00:23:04,720 --> 00:23:06,360 Kessler begins investigating. 321 00:23:07,040 --> 00:23:11,880 and quickly finds out that Nicholas Cosmo is not the solid businessman he 322 00:23:11,880 --> 00:23:12,880 appears to be. 323 00:23:13,340 --> 00:23:18,860 Previous jail time, we found that he had filed for bankruptcy in 98. 324 00:23:19,800 --> 00:23:23,260 The corporation Agape World was set up while he was in jail. 325 00:23:24,060 --> 00:23:29,440 In the late 90s, Cosmo served more than a year in federal prison for securities 326 00:23:29,440 --> 00:23:34,460 fraud. He was able to keep it secret from his Agape investors for more than 327 00:23:34,460 --> 00:23:35,460 eight years. 328 00:23:36,440 --> 00:23:41,380 Now, Michael Kessler starts to believe that the whole operation is a scam. 329 00:23:41,740 --> 00:23:46,480 As we did research on the bridge loans that he said that he was issuing, we 330 00:23:46,480 --> 00:23:50,820 found that he didn't have liens on the properties, which was highly suspicious 331 00:23:50,820 --> 00:23:55,040 to us. And also some of the people in the properties never even heard of Mr. 332 00:23:55,180 --> 00:23:59,800 Cosmo. And as we dug deeper, it became clear that this was just simply another 333 00:23:59,800 --> 00:24:00,800 Ponzi scheme. 334 00:24:02,280 --> 00:24:06,900 Kessler brings his information to law enforcement, and the FBI begins an 335 00:24:06,900 --> 00:24:07,900 investigation. 336 00:24:08,600 --> 00:24:14,020 But he also wants to get the word out to potential investors, so he rings an old 337 00:24:14,020 --> 00:24:17,560 friend. I said to Dave, there's something breaking on Long Island that 338 00:24:17,560 --> 00:24:18,560 should be aware of. 339 00:24:18,960 --> 00:24:23,100 Long Island Business News investigative reporter, David Wenzelberg. 340 00:24:23,660 --> 00:24:29,180 There was a lot of people putting money in, and the interest was like 14 % in a 341 00:24:29,180 --> 00:24:32,820 very, very short amount of time, as little as 72 days. 342 00:24:33,340 --> 00:24:38,800 All the classic signs, as Mike would say, the red flags came up that it was a 343 00:24:38,800 --> 00:24:39,800 Ponzi scheme. 344 00:24:40,220 --> 00:24:46,140 On August 29, 2008, the Long Island Business News runs its first story on 345 00:24:46,140 --> 00:24:48,180 Nicholas Cosmo's criminal past. 346 00:24:48,960 --> 00:24:51,000 And many investors get nervous. 347 00:24:53,180 --> 00:24:58,200 Then, a few months later, the largest financial fraud case in U .S. history 348 00:24:58,200 --> 00:25:02,080 breaks. Bernie Madoff is 24 -7 News. 349 00:25:02,640 --> 00:25:09,420 When you heard a $64 billion fraud by Bernie Madoff that went on for decades, 350 00:25:09,420 --> 00:25:13,140 lot of investors said, wait a minute, what's going on with my money? And they 351 00:25:13,140 --> 00:25:16,820 began to check. And a lot of people began to try to pull their money out. 352 00:25:18,380 --> 00:25:23,200 For more than four years, Nick Cosmo is inflating the loan amounts he's 353 00:25:23,200 --> 00:25:24,600 supposedly lending out. 354 00:25:24,880 --> 00:25:30,760 And although he collects more than $350 million in investor dollars, Agape lends 355 00:25:30,760 --> 00:25:33,400 a paltry $25 million to borrowers. 356 00:25:34,760 --> 00:25:39,100 He's paying returns not with profits, but with investor principle. 357 00:25:40,380 --> 00:25:44,340 In this exclusive phone interview, Cosmo explains. 358 00:25:47,880 --> 00:25:50,420 Purely, they were taking out other people's money. 359 00:25:50,720 --> 00:25:57,580 And at the same time, I was also trading futures, trying to make 360 00:25:57,580 --> 00:26:02,140 up all the deficit that incurred from my own doing. 361 00:26:04,000 --> 00:26:09,280 Increasingly desperate, Cosmo is gambling in the high -stakes futures 362 00:26:09,280 --> 00:26:11,320 burning up to a million dollars a day. 363 00:26:12,460 --> 00:26:18,340 At the time, he's hiding all of this, trying to run damage control and calm 364 00:26:18,340 --> 00:26:21,020 investors with seminars at his offices. 365 00:26:21,560 --> 00:26:24,880 I'd invite about 100 or 115 clients every night. 366 00:26:25,220 --> 00:26:29,480 I'd let them ask any single question that they could possibly think of, 367 00:26:29,480 --> 00:26:31,780 to relieve their fears. 368 00:26:32,160 --> 00:26:35,420 And, you know, it worked for the most part. 369 00:26:35,640 --> 00:26:39,460 And, you know, what I was doing was basically trying to put out buyers one 370 00:26:39,460 --> 00:26:40,460 at a time. 371 00:26:40,970 --> 00:26:44,270 He had the whole big hall there at his office building. 372 00:26:44,490 --> 00:26:48,410 And I tell you, he did a great job as far as conning us. 373 00:26:49,430 --> 00:26:54,210 Investor Kevin Milano attends one of Cosmo's seminars with the intention of 374 00:26:54,210 --> 00:26:55,210 getting his money back. 375 00:26:55,410 --> 00:27:00,750 But Cosmo not only convinces him everything is fine, he even sells Milano 376 00:27:00,750 --> 00:27:02,990 insurance on his investment. 377 00:27:03,530 --> 00:27:07,630 You know, he started to make us feel comfortable with the fact that even if 378 00:27:07,630 --> 00:27:10,640 everything goes bust, We're insured. 379 00:27:11,080 --> 00:27:14,900 So then he that's how people even invested, which I did, too, invested 380 00:27:14,900 --> 00:27:17,320 probably thirty five hundred dollars for insurance. 381 00:27:18,260 --> 00:27:22,820 The seminar was unbelievable because this again, this was in late December 382 00:27:22,820 --> 00:27:27,580 Madoff, where there were rampant rumors that this company was about to collapse. 383 00:27:27,780 --> 00:27:30,240 And he was able to convince people to give him more money. 384 00:27:30,440 --> 00:27:32,180 He was really, truly amazing. 385 00:27:32,440 --> 00:27:35,020 You know, we called him the fraud whisperer around the newsroom. 386 00:27:36,960 --> 00:27:38,600 Next on American Greed. 387 00:27:39,310 --> 00:27:44,850 Cosmo might be able to fool his investors for now, but the feds are 388 00:27:45,070 --> 00:27:48,750 They were investigating. They had some wiretaps up and had done some 389 00:27:48,930 --> 00:27:50,490 so they were on his trail. 390 00:27:50,890 --> 00:27:53,670 How long till we get our principal back, Nick? 391 00:28:00,530 --> 00:28:06,410 In December 2008, Nicholas Cosmo's money -lending firm, Agape World, is on the 392 00:28:06,410 --> 00:28:07,410 brink of collapse. 393 00:28:08,840 --> 00:28:14,000 When interest payments start falling behind, many investors begin to panic. 394 00:28:14,360 --> 00:28:17,800 People started to ask for their money back, their principal back. 395 00:28:18,020 --> 00:28:19,060 People were getting nervous. 396 00:28:19,920 --> 00:28:25,800 Problem is, Cosmo doesn't have the money to pay his investors back because his 397 00:28:25,800 --> 00:28:28,700 entire business model is a sham. 398 00:28:36,990 --> 00:28:38,290 the money that came into the company. 399 00:28:39,130 --> 00:28:43,190 And that's obviously what is considered a Ponzi. 400 00:28:44,490 --> 00:28:50,090 In addition to paying out returns with other people's money, Cosmo is using 401 00:28:50,090 --> 00:28:53,510 of millions of investor dollars to feed his gambling addiction. 402 00:28:54,090 --> 00:28:58,590 It's not a guy who, oh, gee, I made some mistakes, I made some bad investment 403 00:28:58,590 --> 00:29:00,490 choices, and some investors got hurt. 404 00:29:00,910 --> 00:29:04,550 He set up the scheme from the beginning knowing it was going to be a... 405 00:29:04,880 --> 00:29:09,080 criminal fraud, a rip -off, and he didn't care. He didn't care one bit. 406 00:29:10,500 --> 00:29:16,040 What Cosmo doesn't know is that the FBI and the U .S. Postal Inspectors are on 407 00:29:16,040 --> 00:29:17,040 to him. 408 00:29:17,820 --> 00:29:21,840 Investigators are secretly posing as potential investors and borrowers, 409 00:29:21,860 --> 00:29:24,200 gathering intel on the copy world. 410 00:29:25,100 --> 00:29:27,640 I mean, 411 00:29:29,200 --> 00:29:33,540 I want to make sure it's very clear to everybody that my job may be here right 412 00:29:33,540 --> 00:29:34,540 now. 413 00:29:41,890 --> 00:29:47,950 This was a way to calm everybody so that they wouldn't run to the FBI or, you 414 00:29:47,950 --> 00:29:51,910 know, they wouldn't pressure him to give him his money back, although most 415 00:29:51,910 --> 00:29:52,990 people already were. 416 00:29:53,590 --> 00:29:58,270 It was sort of a desperation move. And if you listen to the call, he did 417 00:29:58,270 --> 00:30:00,750 convince a few people to hold on. 418 00:30:03,950 --> 00:30:05,550 behind you and make sure you go through with this. 419 00:30:05,810 --> 00:30:09,250 Well, I appreciate that very much, and the only thing I need is patience from 420 00:30:09,250 --> 00:30:11,390 everybody in this situation. 421 00:30:12,750 --> 00:30:16,850 The other thing you have to consider is a lot of these investors didn't want the 422 00:30:16,850 --> 00:30:20,890 scheme to collapse, if it was a scheme, because then they knew their money was 423 00:30:20,890 --> 00:30:24,030 gone. So a lot of them were just holding on. 424 00:30:26,090 --> 00:30:30,630 Dom DeCalandria has his entire life savings invested with Agape. 425 00:30:31,350 --> 00:30:32,770 He's on the conference call. 426 00:30:33,320 --> 00:30:35,240 and comes away feeling optimistic. 427 00:30:35,560 --> 00:30:37,200 It's his job to gain our confidence. 428 00:30:37,580 --> 00:30:39,820 And at the same time, he has to convince people. 429 00:30:40,080 --> 00:30:41,240 So he was good at both. 430 00:30:41,700 --> 00:30:46,280 We had confidence in him, and we were convinced that this was legitimate. 431 00:30:48,200 --> 00:30:52,400 Cosmo may be keeping his cool in front of investors, but he's getting 432 00:30:52,400 --> 00:30:57,460 increasingly desperate and raising the stakes on his gambling, trying to hit a 433 00:30:57,460 --> 00:31:00,100 big payday in high -risk futures trading. 434 00:31:00,480 --> 00:31:05,910 As things got a little tighter, His trades got even more desperate and more 435 00:31:05,910 --> 00:31:06,910 risky. 436 00:31:07,250 --> 00:31:10,630 Eventually, he ended up losing close to $100 million in those trades. 437 00:31:15,010 --> 00:31:21,850 On January 26, 2009, the Feds move in, raiding Agape World offices and letting 438 00:31:21,850 --> 00:31:24,410 Cosmo know they'll be back to talk to him. 439 00:31:25,100 --> 00:31:30,200 We saw the FBI and postal inspectors and other law enforcement officials going 440 00:31:30,200 --> 00:31:35,280 into these offices, dozens of agents coming out with box after box after box 441 00:31:35,280 --> 00:31:39,000 evidence, and what we learned later was a $400 million fraud. 442 00:31:39,940 --> 00:31:45,440 As news of the raid spreads quickly, investor Louis Piccoli gets a call from 443 00:31:45,440 --> 00:31:46,440 Agape broker. 444 00:31:46,640 --> 00:31:50,880 He was in tears. I can't believe it. It's all a scam. You've got to get down 445 00:31:50,880 --> 00:31:51,880 here. 446 00:31:51,980 --> 00:31:55,200 You literally, you hang up and you look at the phone for a moment. I'm thinking, 447 00:31:55,320 --> 00:32:01,440 ring. Please ring and tell me that was just in the worst taste, but that was a 448 00:32:01,440 --> 00:32:02,440 joke. 449 00:32:03,500 --> 00:32:08,540 Piccoli has brought in 40 friends and family members to Agape, and they have a 450 00:32:08,540 --> 00:32:10,620 total of $4 million invested. 451 00:32:11,460 --> 00:32:13,400 He races to Agape headquarters. 452 00:32:14,260 --> 00:32:17,640 There's 100 people on the steps outside demanding to get in. 453 00:32:18,730 --> 00:32:23,370 I get into the office, and there's brokers, grown men, crying. 454 00:32:27,170 --> 00:32:32,130 And we get Nick, and he's just walking around like a car wreck. 455 00:32:32,690 --> 00:32:33,950 He's just in a daze. 456 00:32:34,970 --> 00:32:38,990 And now this is literally the quintessential angry moth. They're 457 00:32:38,990 --> 00:32:41,930 in and, quite honestly, kill him. 458 00:32:42,210 --> 00:32:44,410 You screwed a lot of people, all of you. 459 00:32:46,670 --> 00:32:51,050 Lou Piccoli and a couple of friends stay level -headed while trying to get 460 00:32:51,050 --> 00:32:52,390 answers out of Cosmo. 461 00:32:52,970 --> 00:32:58,590 So I start talking to him, and I'm still hoping somehow that there's money 462 00:32:58,590 --> 00:33:02,770 somewhere. You had to hide money somewhere, an offshore account. 463 00:33:03,010 --> 00:33:06,190 I don't care if it's in a pickle jar in your yard, somewhere. 464 00:33:06,930 --> 00:33:10,450 But how do I get that? How do I get that out of him? 465 00:33:11,370 --> 00:33:16,950 But Coley decides the only shot he has at recovering any money is to keep Nick 466 00:33:16,950 --> 00:33:20,490 Cosmo safe from the investors who want a piece of him. 467 00:33:20,730 --> 00:33:23,390 He throws a coat over one of the broke heads and he goes running through the 468 00:33:23,390 --> 00:33:24,650 crowd and everybody follows him. 469 00:33:24,930 --> 00:33:27,010 And then Nick Cosmo walks out the back door. 470 00:33:28,950 --> 00:33:32,710 The men drive Cosmo to his attorney's office in Manhattan. 471 00:33:34,430 --> 00:33:38,610 But later that night, he takes a commuter train back to Long Island. 472 00:33:38,940 --> 00:33:40,100 to meet his fate. 473 00:33:40,360 --> 00:33:44,320 We'd all gathered at the postal inspector's offices for Cosmo's arrival. 474 00:33:44,580 --> 00:33:48,640 Everyone wanted to see who was this latest crook who had ripped off everyday 475 00:33:48,640 --> 00:33:54,720 people. And postal inspectors pulled into the parking lot, and there was Nick 476 00:33:54,720 --> 00:33:56,640 Cosmo in handcuffs. 477 00:33:58,620 --> 00:34:04,520 Cosmo is booked on 32 counts of mail and wire fraud, and the local press dubs 478 00:34:04,520 --> 00:34:06,220 him Mini Madoff. 479 00:34:06,880 --> 00:34:12,360 There was another huge Ponzi scheme where everyday investors were ripped 480 00:34:12,520 --> 00:34:14,120 all because of greed. 481 00:34:14,580 --> 00:34:20,560 Nearly identical rip -off schemes, if you will. You put money in, you'll get 482 00:34:20,560 --> 00:34:23,500 returns out, and it was all based on a lie. 483 00:34:23,719 --> 00:34:28,900 So Cosmo and Madoff, hand in hand, glove in glove, one in the same. 484 00:34:30,060 --> 00:34:32,900 On October 29, 2010... 485 00:34:33,389 --> 00:34:39,010 Nicholas Cosmo stands before a judge in federal criminal court, accused of 486 00:34:39,010 --> 00:34:44,530 running a Ponzi scheme and stealing $400 million from more than 4 ,000 487 00:34:44,530 --> 00:34:45,530 investors. 488 00:34:46,510 --> 00:34:50,949 Cosmo pleads guilty to one count each of mail fraud and wire fraud. 489 00:34:51,770 --> 00:34:55,889 Twelve months later, he is sentenced to 25 years in prison. 490 00:34:56,510 --> 00:35:00,030 More than 30 of his victims are on hand to watch. 491 00:35:01,130 --> 00:35:05,190 So is Long Island business news reporter Dave Winsleberg. 492 00:35:05,590 --> 00:35:07,110 The victims were devastated. 493 00:35:07,410 --> 00:35:11,070 These were people who lost their life savings, people that couldn't afford to 494 00:35:11,070 --> 00:35:12,070 lose their life savings. 495 00:35:12,290 --> 00:35:17,150 People lost their money for colleges, for their kids. It was all they could do 496 00:35:17,150 --> 00:35:20,970 to keep from, you know, rushing up and strangling Cosmo, I'm sure, when they 497 00:35:20,970 --> 00:35:21,970 were in the courtroom. 498 00:35:22,850 --> 00:35:27,650 Special education administrator Kevin Milano lost $210 ,000. 499 00:35:28,810 --> 00:35:32,910 And his dreams of retiring to a Florida home with his wife were on hold 500 00:35:32,910 --> 00:35:36,310 indefinitely, thanks to Nicholas Cosmo. 501 00:35:37,130 --> 00:35:40,810 This is a man that you're sitting there and watching fix up the little he feels 502 00:35:40,810 --> 00:35:44,750 like, and you say, oh yeah, he's absolutely, he wouldn't lie to you, you 503 00:35:45,190 --> 00:35:50,350 So, you know, there has to be something wrong with him, and hopefully one day 504 00:35:50,350 --> 00:35:51,570 he'll get some help. 505 00:35:53,570 --> 00:35:57,810 64 -year -old hairdresser Ellen Gabriel lost $130 ,000. 506 00:35:58,760 --> 00:36:03,700 Her entire retirement fund she had been investing faithfully in for 30 years. 507 00:36:04,720 --> 00:36:08,680 Now, she believes she will have to work until the day she dies. 508 00:36:09,700 --> 00:36:13,000 Retirement isn't even an option. 509 00:36:15,060 --> 00:36:20,440 I do work seven days a week. I've worked holidays. I've worked Christmas. I've 510 00:36:20,440 --> 00:36:21,560 worked New Year's. 511 00:36:21,800 --> 00:36:26,860 If it snows, if it rains, it doesn't matter. I just go. I have clients. I go. 512 00:36:26,860 --> 00:36:27,860 do. 513 00:36:29,740 --> 00:36:34,660 48 -year -old Louis Piccoli still lives in his oceanfront home on Long Island. 514 00:36:35,280 --> 00:36:36,280 For now. 515 00:36:37,120 --> 00:36:41,540 It's in foreclosure, and he and his kids could be kicked out any day. 516 00:36:42,680 --> 00:36:45,700 Panic one day that the sheriff's department's going to come, knock on the 517 00:36:45,800 --> 00:36:51,280 and tell you you've got 48 hours a week to vacate. 518 00:36:52,520 --> 00:36:53,520 Okay. 519 00:36:54,160 --> 00:36:55,160 Here's my question. 520 00:36:55,400 --> 00:36:56,400 Where? 521 00:36:57,460 --> 00:36:58,920 Tell me, where do I take him? 522 00:37:01,770 --> 00:37:06,850 A billionaire for 25 years, Piccoli left the construction business to work full 523 00:37:06,850 --> 00:37:10,550 -time handling family and friends' investments in Agape World. 524 00:37:11,390 --> 00:37:16,250 But in the wake of the real estate bust, he doesn't even have his old trade to 525 00:37:16,250 --> 00:37:17,250 fall back on. 526 00:37:18,310 --> 00:37:21,550 Piccoli says he has little work and few contacts. 527 00:37:22,110 --> 00:37:26,950 And he says the Agape ordeal has been a huge contributor to the breakup of his 528 00:37:26,950 --> 00:37:27,950 marriage. 529 00:37:28,070 --> 00:37:29,770 I haven't had a good night's sleep since. 530 00:37:30,270 --> 00:37:31,310 I can't put... 531 00:37:31,720 --> 00:37:35,700 two, three straight hours together. You just, you constantly, it doesn't go 532 00:37:35,700 --> 00:37:37,260 away. How can it? 533 00:37:38,100 --> 00:37:40,180 The nightmare I'm living isn't just my own. 534 00:37:40,980 --> 00:37:44,880 My parents' home is in foreclosure because I got them involved in this. 535 00:37:45,700 --> 00:37:49,620 I have relatives that can't do things for their children because they lost 536 00:37:49,620 --> 00:37:50,620 everything. 537 00:37:52,080 --> 00:37:57,020 The only thing that keeps me going, and I honestly don't mean to sound corny, 538 00:37:57,100 --> 00:38:00,400 but my children will never fully understand. 539 00:38:02,030 --> 00:38:04,090 That they saved me. 540 00:38:06,150 --> 00:38:11,390 Real estate appraiser Dominic DeColandria's entire life savings has 541 00:38:11,390 --> 00:38:12,390 out. 542 00:38:12,410 --> 00:38:17,250 But instead of spending energy on anger, he takes a more reflective approach. 543 00:38:17,650 --> 00:38:19,990 He says he's learned a valuable lesson. 544 00:38:20,430 --> 00:38:25,210 The victim's got to take some responsibility, too. You know, we 545 00:38:25,210 --> 00:38:30,530 been victims had we not failed to recognize that this was an unreasonable 546 00:38:30,530 --> 00:38:31,530 of principle. 547 00:38:31,960 --> 00:38:34,460 So there's greed on both sides of the fence. 548 00:38:34,740 --> 00:38:38,760 There's some you can feel sorry for and some you might not, but we all need to 549 00:38:38,760 --> 00:38:39,760 be responsible. 550 00:38:40,400 --> 00:38:44,280 A trustee is appointed to the case to try and recover funds. 551 00:38:44,840 --> 00:38:50,260 But so far, he has only recouped an estimated $20 million, returning just a 552 00:38:50,260 --> 00:38:51,800 fraction of that to victims. 553 00:38:52,640 --> 00:38:57,460 In this case, the victims are lucky if they get pennies and maybe even... 554 00:38:57,770 --> 00:39:01,350 Less than a penny on the dollar when everything's finally recovered. 555 00:39:02,530 --> 00:39:07,670 For the past three years, Nicholas Cosmo gets by in an eight foot by eight foot 556 00:39:07,670 --> 00:39:09,110 cell in federal prison. 557 00:39:10,170 --> 00:39:14,390 Cosmo tells American Greed that he never intended to hurt anyone. 558 00:39:14,790 --> 00:39:20,070 In my mind and in my heart, I was able to get through every single day because 559 00:39:20,070 --> 00:39:23,590 thought I was helping people. That I was going to be able to fix this problem 560 00:39:23,590 --> 00:39:26,610 that I created, but I was going to be able to fix this problem. 561 00:39:26,920 --> 00:39:31,640 So that energy, that inner drive that I had was driven by that. 562 00:39:33,160 --> 00:39:37,200 Cosmo also believes his sentence of 25 years is unfair. 563 00:39:37,460 --> 00:39:42,580 He is appealing it, claiming he wants to get out of prison early in order to 564 00:39:42,580 --> 00:39:44,500 work to pay back his victims. 565 00:39:45,060 --> 00:39:51,720 I don't blame anyone for feeling ill will or hatred 566 00:39:51,720 --> 00:39:54,720 or anything, disillusioned. 567 00:39:55,050 --> 00:39:59,930 by me or my actions. I've taken full responsibility for everything I've done. 568 00:40:00,190 --> 00:40:02,810 I'm obviously being punished for it. 569 00:40:03,150 --> 00:40:08,890 And the only thing I seek is just an opportunity to 570 00:40:08,890 --> 00:40:11,070 pay them back. 571 00:40:13,390 --> 00:40:18,430 One of those victims is Kevin Milano, who has spent his career working in 572 00:40:18,430 --> 00:40:19,430 special education. 573 00:40:20,150 --> 00:40:24,530 He believes there is a lesson Nick Cosmo should have learned early in life. 574 00:40:24,960 --> 00:40:25,960 but didn't. 575 00:40:26,100 --> 00:40:29,140 I work with kids who are severely developmentally delayed. 576 00:40:29,360 --> 00:40:32,220 You know what? They know what's right, and they know what's wrong. 577 00:40:32,660 --> 00:40:36,120 But he knew it, and he did it anyway. 578 00:40:36,500 --> 00:40:38,780 If he stayed in jail for the rest of his life, that would be fine.