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Alleged 'Mini-Madoff' Cosmo Due in Court on Friday

Nicholas Cosmo, the Long Island man accused of running a $380 million Ponzi scheme, will appear in Federal Court in Central Islip, N.Y. on Friday.

His attorney, Stacey Richman of the Law Offices of Murray Richman, said Cosmo will consent to an extension on a preliminary hearing.

Court papers filed Wednesday say "both sides want the extension because they are engaged in plea negotiations which they belive are likely to result in a disposition of this case without trial", but Richmond says no plea negotiations have taken place. She says both the defense and prosecution continue to investigate the case.

Richman recently replaced Cosmo's first attorneys, Stephen Feldman and Arthur Jakoby of Herrick Feinstein.

Cosmo remains in jail as the two sides have yet to agree on his bail conditions.

Cosmo was arrested on Jan. 26 on one count of mail fraud. He and a cadre of brokers allegedly persuaded over 1,000 investors to give them money in exchange for returns of up to 60 percent.

Nicholas Cosmo
CNBC.com
Nicholas Cosmo

Cosmo says that money was used in turn to provide short-term loans to businesses to cover their credit card receivables and to real estate developers through his company Agape World.

Investors, many of whom had been receiving hefty payouts from Agape, say the payouts stopped last summer. Agape claimed it could not repay its investors because the businesses it had lended to had stopped repaying the loans.

Richman says it is her belief that some of those loans are properly secured.

This is not Cosmo's first brush with the law. He served 21 months in prison starting in 1999 for financial fraud.

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