Nicholas Cosmo Arrested, Charged with Mail Fraud as Feds Invesitgate Another Possible Ponzi Scheme on Long Island

Photo: Entrepreneur Magazine, Nicholas Cosmo

More drama. Another Ponzi scheme in coming to light. Nicholas Cosmo, president and CEO of Agape World Inc., in Hauppauge, Long Island, has been accused of bilking investors through a scheme that has been running for quite a long time. The scumbag surrendered to authorities tonight and has been charged with mail fraud. Hah. Another one bites the dust! Angry investors descended on the office earlier on Monday demanding information on their accounts, which are most likely nonexistent now. Cosmo was able to attract $400 million in investments from unsuspecting investors, maybe a few greedy ones as well.

According to 1010 Wins, on Friday, Cosmo told more than 150 investors that all payouts are suspended because real-estate deals the firm backed are facing foreclosure. Suffolk County police were called to the building after the investors refused to leave the offices. Agape said it specializes in short-term loans to builders, paying a high interest rate to those who invest. It also seems to specialize in robbing people blind. If these allegations are true, we will see more people literally losing the shirts off their backs. I am glad they caught him before he tried to kill himself or stage his death.

1010 Wins WEB EXTRA: Letter from Cosmo to Investors

While the amount in question here pales in comparison to the $50 billion Ponzi scheme allegedly spearheaded by Bernard Madoff, the amounts are large enough to attract investigation from the big guns — FBI, U.S. Postal Inspectors and local law enforcement. Yeah, there will be more Ponzi schemes uncovered as the financial industry declines. It seems that Mr. Cosmo is not a stranger to the correction system. He was convicted of a federal charge of felony fraud and swindle in 1999 and sentenced to 21 months in prison. According to the U.S. Bureau of Prisons, he was released in August 2000. But he backslid and committed an even bigger crime. I am all for second chances, but this scumbag needs to be behind bars for a long time.

Filed under: Agape World Inc., Foreclosure, Nicholas Cosmo, Ponzi scheme

Morris Brown College Faces Foreclosure on Residence Hall, City of Atlanta Shuts off Water Services

It is a lowdown dirty shame that the same historically black college is experiencing some serious financial problems again. The problem is that 127-year old Morris Brown College has faced a previous financial indignity. Well, evidently they did not learn the first time and now the sale of one of its classroom buildings will be auctioned on the steps of Fulton County courthouse. A bank representing investors who purchased bonds issued to build Jordan Hall on the Morris Brown campus is foreclosing on the property, saying the school defaulted on a $13.1 million debt dating to 1996. The foreclosure sale is scheduled for January 6, less than a week before the school is supposed to begin its spring semester.

The school suffered another indignity as well. The city of Atlanta cut off water service to the campus last week because they are delinquent on their water bill to the tune of $380,000. The school’s ability to resume classes is in serious jeopardy. Some of these water bills date to February 2004. This is a travesty and a disgrace. When have you ever heard of a school’s water service being cut? The school administrators are a disgraceful lot. Of course they will need temporary loans for the school’s most critical needs–faculty and staff payroll, utilities and other operating expenses.

Rhonda Copenny, a member of the Morris Brown’s board of trustees, said the school won’t know until after Christmas whether it can obtain short-term loans to keep its doors open. “Nothing could be solidified” on Monday, she said, adding that the trustees are “optimistic.” “It’s not like the school was caught off guard,” she said. “They’ve been working on the big picture a long time, and it’s coming to fruition now — we think.” The top priority at the moment is getting water service restored, Copenny said. School leaders hope to meet with city officials to work out another payment plan to erase the old bills.

It appears the foreclosure sale will take place unless Morris Brown officials can persuade investors to give them more time to pay the nearly 13-year-old debt, said Gregory Worthy, an Atlanta lawyer for U.S. Bank, which represents the investors.
“They’ve been in default on the bond issue for a good while now,” Worthy said Monday. “The original principal amount of the bonds is due and payable.” Source: Atlanta Journal Constitution.

This school is no stranger to controversy and their financial problems have been brewing for a while.The school lost its accreditation in 2002, and its former president, Dr. Delores Cross, and former financial aid director were convicted in a federal embezzlement case in 2006. They can’t possibly expect prospective students to give this school a second look, Enrollment, which was once nearly 3,000, has dropped as low as 56 in recent years before bouncing back to about 240 this fall. They need to fire the president and all the members on the board of trustees. This school was built to empower African Americans, not to tear them down.

Filed under: City of Atlanta, Dr. Delores Cross, Foreclosure, Historically Black College, Morris Brown College, Water Service

American Idol’s Fantasia’s Home in Foreclosure

According to US Magazine.com, Fantasia Barrino, the third season winner of American Idol, is about to loose one of her Charlotte, North Carolina homes to foreclosure. The six bedroom, 6,232 square foot home is scheduled to be auctioned on January 12th 2009.

This is one of two of the 8 time Grammy winner’s homes in North Carolina. The home in foreclosure is stated to have been purchased at $1.3 million dollars according to public records.

Is this just another sign of the economy or is this something totally different that we see time and time again? Fantasia has appeared in a couple of movies and has produced several hits. I wonder where her financial troubles are coming from. Are stars being born to fail in Hollywood’s dog-eat-dog world, or are they not being taught or catching onto the important part of being a celebrity?

Many stars come and go and you always hear of celebrities that face financial woes; but that’s usually after their short lived status has fizzled in America’s short attention span of the Hollywood glamor craze.

In my opinion Fantasia should be doing okay. She’s still putting out hits. But I think like so many other African-American stars, she’s missing out on the big part of being a celebrity and that’s how to maintain your wealth.

Filed under: Fantasia Barrino, Foreclosure, Hollywood

Carlene Balderrama Commits Suicide After Faxing Letter to Mortgage Company Before Foreclosure Auction

This has got to be the most heart wrenching news story I have read in a long time. The mortgage crisis has claimed its first victim. Carlene Balderrama was behind on her mortgage for 42 months and fatally shot herself shortly after faxing a letter to PHH Mortgage saying that by the time they foreclosed on her house that day, should would be dead. Police said that Mrs. Balderrama used her husband’s high-powered rifle to kill herself.

Carlene Balderrama, 53, was apparently distraught that the company was planning to sell her foreclosed house at 5 p.m. Tuesday, according to Taunton, MA, Police Chief Raymond O’Berg.

O’Berg said officers found Balderrama dead of a gunshot wound inside her 103 Duffy Drive house just over an hour after employees at the mortgage company, the name of which has not been released, received the ominous fax message and called police.

“By the time you foreclose on my house I’ll be dead,” O’Berg said the fax read in part.
The chief also said a suicide note found next to the body urged the woman’s husband and son to “take the insurance money and pay for the house.” He said that the woman’s husband had no idea the house was about to be auctioned. “She handled all the bills,” the chief said.

The auction was scheduled to start at 5 p.m. and interested buyers arrived at the property in Taunton, about 35 miles south of Boston, while Balderrama’s body was still inside, according to Taunton Police Chief Raymond O’Berg.

“She put in her suicide note that it got overwhelming for her.” “Apparently she didn’t have anyone to talk to. She didn’t come to me. I don’t know why.

I did a little more digging around and found out that the family had some serious money woes. According to the Boston Herald, the woman’s husband, John Balderrama, had a shaky financial history, including three recent bankruptcy attempts since 2004 and an earlier foreclosure filing. The couple bought the split-level ranch-style house six years ago for $232,000.

This is really a sad turn of events for this family. It is important for couples to work together to solve their problems. No-one knows what really went on in this woman’s life and the stress she was under. I know how callous creditors can be at times, but there is always a way out, even when it seems hopeless. My question to my readers is, should the mortgage company bear the blame for this? After all, news reports said her mortgage was unpaid for 42 months. There are victims all around in this case and it is sad that this woman felt so desperate that she had no other choice but to take her life.

Filed under: Carlene Balderrama, Foreclosure, PHH Mortgage, Suicide