MILWAUKEE (WITI) -- He was once an up-and-coming stockbroker, but he had a costly vice -- not just for him, but for those who trusted he was making legitimate investments. Instead, he was gambling away millions.
"Seemed legit. I never heard of the word Ponzi," Sal said.
Sal learned the definition of Ponzi scheme the hard way. His family lost half a million dollars in a $400 million Ponzi scheme run by Nicolas Cosmos.
"You have a guy who supposedly looks into your eyes, tells you everything is fine, says you`re going to get your money back, shakes your hand and gives you a hug. He`s stealing your money," Sal said.
Sal wasn't alone. 6,000 people invested in Agape World, the company Cosmos claimed made money from short-term lending to businesses.
"He promised to pay investors anywhere from 10% to 15% interest on these loans that were typically 60 days or there about," U.S. Postal Inspector Richard Cinnamo said.
At that rate, investors could make 60% to 80% back on their money. That might sound good, but it wasn't a reality.
"We did undercover work, posing as an investor, a prospective borrower to see if this project was feasible. I quickly learned it was not," Cinnamo said.
Postal inspectors say research money matters.
"When someone tells you anything pays handsomely is risk-free, you need to run the other way. It`s a scam," Cinnamo said.
Cosmo pleaded guilty and was sentenced to 25 years in prison. He was also ordered to pay back $179 million.