U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22391/June 12, 2012
Securities and Exchange Commission v. Bryan Arias, et al., Civil Action No. 12-CV-2937 (E.D.N.Y.)
On June 12, 2012, the United States Securities and Exchange Commission announced that it filed an action in the United States District Court for the Eastern District of New York against Bryan Arias, Hugo A. Arias, Anthony C. Ciccone, Salvatore Ciccone, Diane Kaylor (Kaylor), Jason A. Keryc, Anthony Massaro (Massaro), Christopher E. Curran (Curran), Ryan K. Dunaske (Dunaske), Michael P. Dunne (Dunne), Martin C. Hartmann III (Hartmann), Michael D. Keryc, Ronald R. Roaldsen, Jr. (Roaldsen), and Laura Ann Tordy (Tordy). The Commission’s complaint seeks, against each of the Defendants, injunctive relief, disgorgement, and civil penalties.
The Commission’s complaint alleges that the Defendants were the principal sales agents for Agape World, Inc. (Agape), a $415 million Ponzi scheme organized by Nicholas J. Cosmo (Cosmo), the president of Agape. From 2005 through January 2009, more than 5,000 investors nationwide, including more than 1,000 investors on Long Island, New York, purchased the Agape securities. The Agape securities were fictitious with, at best, a fraction of investor funds used as represented to investors by the Defendants. The Commission’s complaint alleges further that Defendants Bryan and Hugo Arias, Anthony and Salvatore Ciccone, Kaylor, Jason Keryc, Massaro, Dunne, Hartmann, Michael Keryc, and Tordy each knowingly or recklessly, and repeatedly, made misrepresentations to investors concerning the Agape securities. These same defendants offered and sold Agape securities despite numerous red flags of fraud, including Cosmo’s prior conviction for fraud, the too-good-to-be-true returns and incredible safety of principal promised to investors, a series of extensions and defaults by Agape, and dire warnings about Agape’s financial condition. The Agape securities were not registered with the Commission and, while selling the Agape securities, none of the Defendants was registered with the Commission in any capacity or associated with a registered broker or dealer.
The Complaint charges Defendants Bryan and Hugo Arias, Anthony and Salvatore Ciccone, Kaylor, Jason Keryc, Massaro, Dunne, Hartmann, Michael Keryc, and Tordy with violations of Section 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The Complaint charges all of the Defendants with violations of Section 15(a) of the Exchange Act, and Sections 5(a) and 5(c) of the Securities Act.