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Banking and Finance

Ponzi Associate Jailed For "Mind-Boggling" Money Laundering Scheme

 A New York man accused of playing a role in the $425 million Ponzi scheme perpetrated by Nicholas Cosmo had his bail revoked by a New York federal judge who called "mind-boggling" his efforts to hide over $1.7 million in illicit scheme proceeds. Anthony Ciccone, 39, was ordered into custody by Magistrate Judge A. Kathleen Tomlinson after prosecutors detailed a multi-year scheme by Ciccone to hide nearly $2 million that he gained from Cosmo's Ponzi scheme. Ciccone had previously pleaded not guilty to criminal charges resulting from the scheme.

Ciccone was one of the top brokers in Cosmo's Agape World, which promised investors huge returns in short-term investment contracts. Ciccone was one of Cosmo's many brokers who were paid handsome commissions in return for steering investors into Agape World despite the existence of numerous red flags surrounding the investments. Ciccone, who was formerly a postal worker in Manhattan, ended up receiving approximately $15 million from Cosmo in commissions.

Cosmo was indicted on thirty-two counts of wire fraud and mail fraud, and later pleaded guilty in October 2010 to one count each of wire fraud and mail fraud. Cosmo was subsequently sentenced to a twenty-five year prison term in October 2011. While Cosmo was originally the only one facing criminal charges, authorites later unveiled civil charges against more than a dozen brokers in June 2012, with four brokers, including Ciccone, also facing parallel criminal charges.

After Ciccone was arraigned on a superseding indictment earlier this month, Magistrate Judge Tomlinson agreed to allow him to remain free on the original $1 million bail. However, prosecutors subsequently alleged that Ciccone had been involved in an intricate plot to conceal nearly $2 million realized from Cosmo's scheme. According to prosecutors, Ciccone overpaid approximately $1.7 million in federal and state income taxes beginning in 2008 that was comprised of Ponzi scheme proceeds. Several years later, the funds were returned to Ciccone in the form of tax refunds, and Ciccone subsequently had his wife and mother-in-law launder the refund money through their bank accounts. Once back in Ciccone's possession, the funds were then used for expenses, to pay for two Florida businesses, and even for $350,000 in gold coins.

To date, authorities have only been able to recover approximately $10 million for Cosmo's victims - representing approximately 5% of the $179 million estimated to be lost.

 For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.

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