Sunday, September 15, 2013


In 2011, a Federal Judge, in the Eastern District of New York, sentenced the $400m Ponzi schemer, Nicolas Cosmo, to twenty-five years, and required him to make restitution in the amount of $179m. he was later fined an additional $240m, for using investors' money to trade in commodity futures, without their knowledge, and banned from ever engaging in commodity-related trading again. The defendant's appeal to the Second Circuit failed to give him any relief from his conviction and sentence.

Cosmo defrauded a lot of investors; the media dubbed him the Mini-Madiff. So why can't we easily access any of the information about his case ? A check of the US Bureau of Prisons locator program shows that he is not incarcerated in a Federal institution; I understand that his critical testimony, against others in his Ponzi operation, means that he must be protected, but there's something else.

If you go on the PACER website, to look at his court file, your inquiries mysteriously fail to turn up any results. One cannot access the file by entering his name into the search engine. I find this most disturbing.

But is file has not been sealed by the Court; it has just been placed out of the reach of most researchers, victims' attorneys, and others interested learning about the $413m case. When one cannot access what is supposed to be public information, we all lose.

So how did I find the file ? When I wrote my original 2011 article, about Cosmo's sentencing*, I placed the case number as a footnote, to assist any readers who wished to explore the case. With that 2009 case number, I was able to access the court file, which was closed on 17 October, 2011. On PACER, one may also search by case number, and someone who was closing access to the file must have forgotten that little trick.

So why is Nicolas Cosmo such a mystery ? Longtime readers of this blog may recall my tale of the fraudster whose sealed New York federal criminal file allowed him to perpetrate subsequent fraud in Florida. We cannot practice due diligence if the truth is hidden from view.

Many years ago, when a fraudster from Africa convinced a gullible Swiss banker that he could turn lead into gold, and escaped to Miami with his ill-gotten gains,  a major suit against him by those whom he defrauded in the US was conveniently made unavailable, as it embarrassed local politicians. I refused to give up, and retrieved the file from the desk of the Dade County Circuit Court Bailiff who was entrusted with hiding it. When information is hidden from public view, for any reason, we all lose.

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