The Securities and Exchange Commission today charged 14 sales agents who misled investors and illegally sold securities for a Long Island-based investment firm in the center of a $415 million Ponzi scheme.

The SEC alleges that the sales agents -- including four sets of siblings -- falsely promised investor returns as high as 12 percent to 14 percent in several weeks when they sold investments offered by Agape World Inc. They also misled investors to believe that only 1 percent of their principal was at risk.

The SEC claims that the Agape Securities they peddled were actually non-existent, and investors were merely lured into a Ponzi scheme where earlier investors were paid with new investor funds. The sales agents also turned a blind eye to red flags of fraud and sold the investments without hesitation, receiving more than $52 million in commissions and payments out of investor funds. None of these sales agents were registered with the SEC to sell securities, nor were they associated with a registered broker or dealer. Agape also was not registered with the SEC.

"This Ponzi scheme spread like wildfire through Long Island's middle-class communities because this small group of individuals blindly promoted the offerings as particularly safe and profitable," said Andrew M. Calamari, acting regional director for the SEC's New York Regional Office. "These sales agents raked in commissions without regard for investors or any apparent concern for Agape's financial distress and inability to meet investor redemptions."

According to the SEC's complaint filed in the U.S. District Court for the Eastern District of New York, more than 5,000 investors nationwide were impacted by the scheme that lasted from 2005 to January 2009, when Agape's president and organizer of the scheme Nicholas J. Cosmo was arrested. He was later sentenced to 300 months in prison and ordered to pay more than $179 million in restitution.

The SEC also alleges that sales agents misrepresented themselves to investors, by claiming that their money would be used to make high-interest bridge loans to commercial borrowers or businesses that accepted credit cards. Investor funds were used for Ponzi scheme payments and the agents' sales commissions, and Cosmo lost $80 million while trading futures in personal accounts.

Meanwhile, the sales agents assuredly offered and sold Agape securities to investors despite numerous red flags of fraud, including Cosmo's prior conviction for fraud, the too-good-to-be-true returns, and the incredible safety of principal promised to investors. The sales agents also ignored Agape's relatively small and unknown status as a private issuer of securities, Agape's series of extensions and defaults, and other dire warnings about Agape's financial condition. None of the Agape securities offerings were registered with the SEC.