Nicholas Cosmo is alleged to be a very persuasive fellow.  So persuasive that he managed to amass $370 million to purportedly be used toward construction bridge loans, and which would provide a return to investors in the area of 14%.  That’s huge.  Not so huge as to be impossible, but huge enough to light a fire under an investor sitting on some underutilized savings.  So the feds say it was a Ponzi scheme and busted Cosmo, bringing his company, Agape World, Inc. crashing down.

Cosmo operated on Long Island, a hometown version of Bernie Madoff, if you will.  He didn’t manage the megabucks, the pension funds and the university endowments and the charities that Madoff had, but the savings of well-to-do Long Islanders who wanted a bigger bang for their buck.  As dividend checks started rolling in, word spread of Cosmo and people wanted their piece of the pie.

It’s easy to see how Long Islanders believed in Cosmo.  Construction of new homes, McMansions, was all the rage.  Builders were putting them up on every patch of land available, and people were buying these ugly monstrosities, built of spit and glue, like it was their last chance for salvation.  It became a religion on Long Island that no one lost money in real estate, and this was just another way to cash in on the trend.  Cosmo saw greed, and he filled the niche. 

Many of the investors who now sit at home in a darkened room, wondering how they will survive without their life savings, should give some thought to what they did with the 14% returns they were receiving along the way.  It doesn’t take long to eat up a lot of principal when it’s going out to others in those beautiful monthly checks.  But some investors took their profits and bought the obligatory Mercedes or traveled to exotic lands.  No one can take away their memories.  Others plowed them back into Agape.  They now own a huge share of nothing.

While it’s easy to look at the bilked investors of Agape and blame them for their own greed, this scheme wasn’t so far outside the pale as to suggest that they are total fools.  Bridge loans bring much higher interest rates and are difficult to get.  The scheme was well crafted to appear legitimate, and made a great deal of sense given the construction fever on Long Island.  In fact, maybe it was real and just crashed when the market died and showed so many to be fools.  It’s too soon to say, despite reports to the contrary.

The friends and neighbors on Long Island who once flew high with Agape are now scratching around for salvation.  Inquiries are coming fast and furious about what they can do to recapture their lost assets.  When things go south, people turn to lawyers for help.  This is as it should be.  It’s what lawyers do.

But this is a test for lawyers.  The feds will have an administrator appointed by the Court to amass whatever assets are left or can be found and distribute them, pro rata, to the investors of Agape.  Should Cosmo be convicted, restitution will be ordered.  Whether it will be paid is another matter, but it will be ordered.  Beyond that, there is nothing that any individual investor can do to protect his interests.

While a lawyer can help the investor to coordinate his claim and provide a conduit of information about the status of the case, there is little else the lawyer can offer.  Sue Cosmo?  Get on line.  Jump up and down and scream a lot?  Nobody cares, and nobody is listening.  Whatever can be done, will be done.

Yet some lawyers on Long Island see this as an opportunity to get their own slice of the pie out of these bilked investors.  Hey, if they were stupid enough to be victims once, why not go for two?  In one instance, one local lawyer has already crowed publicly that he’s scored a huge fee out of this morass.  The claim is nonsensical, of course, because a third of nothing is nothing.  But the notion that this lawyer will happily grab a third of whatever pittance is returned to investors, for doing bupkis, hardly makes one a hero.  Leave it to lawyers to find misery and then exploit it yet again.

The Agape investors aren’t the same as the sophisticated major leaguers that were worthy of Bernie Madoff.  They were regular folks, the little league coach, the barbecuing neighbor, the middle-level executive who went to school board meetings.  These are people who worked for their money, and just wanted to do the best with it they could.  A little greedy, perhaps, but not so greedy as to be blameworthy in the process.  Not so greedy as to be unworthy of our sympathy.

Whatever they get back from the marshaled assets that remain will come to them regardless.  A little legal advice would be helpful, as people have an uncanny ability to screw up the simplest of official tasks.  But to crow about the opportunity to grab a third of their recovery isn’t merely tacky, unprofessional and disgraceful.  It’s fundamentally wrong, unethical and tantamount to raping them yet again.  This is nothing to be proud of.