Four charged in $400 million Ponzi fraud NEW YORK (Reuters) - Four former employees of a Long Island-based investment firm were charged Wednesday with running a Ponzi fraud that cost more than 4,000 investors $179 million in losses, federal prosecutors said. Jason Keryc, Anthony Massaro, Anthony Ciccone and Diane Kaylor, misled investors at Agape World Inc and Agape Merchant Advance, by using other investors' money to pay returns, according to a criminal complaint unsealed in a federal court in Central Islip, New York. It was a classic Ponzi scheme that ran for about five years and pulled in $400 million, the complaint said. The founder of Agape and Agape Merchant Advance, Nicholas Cosmo, was sentenced to 25 years in prison in October after pleading guilty to the scheme. The defendants, who worked as either account representatives or brokers at Agape and Agape Merchant Advance, misrepresented the safety of the high-risk trades they made on customers' behalf, promising high rates of return on what they depicted as low-risk investments in short-term commercial loans, the complaint said. But instead of using investors' money as promised, the defendants used most of the funds to pay other investors and to make unauthorized trades in high-risk futures and commodities, according to the complaint. As the scheme went south around 2008, the defendants lied to investors about the status of the loans and continued to solicit money, bringing in nearly $17.4 million, the complaint said. The defendants also sold worried investors a fictitious insurance policy, raising approximately $865,000, according to the complaint. In return, the defendants received commissions ranging from $4.75 million to $16 million, the complaint said. "These defendants allegedly convinced thousands of men and women to part with their hard-earned money for what was supposed to be a safe investment," U.S. Attorney for the Eastern District of New York Loretta Lynch said in a statement. The defendants face up to 20 years in prison if convicted. They are in custody and scheduled to make their initial appearances Wednesday, according to a spokesman for the U.S. Attorney's Office. Attorney Joseph Tacopina said his client Massaro would plead not guilty. Massaro "was fully cooperative with the government in its case against Nicholas Cosmo years ago, so suffice it to say that these charges come as quite a shock," Tacopina said in an emailed statement. Michael Schwed, an attorney for Kaylor, said his client had also cooperated with the government in the Cosmo case and was surprised by the charges. Kaylor is "100 percent" innocent, he said. Attorneys for the other defendants were not immediately available for comment. The case is US v. Keryc et al., in the U.S. District Court for the Eastern District of New York, no. For the U.S.: Assistant U.S. attorneys Christopher Caffarone, Grace Cucchissi and Vincent Lipari. For Keryc: Frank Murray. For Massaro: Joseph Tacopina and Chad Seigel of Tacopina Seigel & Turano. For Ciccone: Stuart Meissner. For Kaylor: Michael Schwed. Reporting by Jessica Dye; Editing by Richard Chang