Magazine Touted Ponzi Scam, Investors Say in $178M Claim
MINEOLA, N.Y. (CN) - Entrepreneur Magazine put Agape World on its "Hot 100" list of "fast-growth businesses," inducing 87 "unsuspecting investors" to lose money on Agape's Ponzi scheme, the 87 say in a $178 million demand in Nassau County Court. The plaintiffs say Entrepreneur regurgitated Agape's claims about its business without investigating them.
Irvine, Calif.-based Entrepreneur featured Agape World in its May 2008 issue, after swallowing Agape's claims without a reasonable investigation, the plaintiffs say.
The complaint states: "Entrepreneur was aware that its Hot 100 lost would be used by Agape to attract unsuspecting investors, and that such investors would rely on the list and its criterion [sic] in their decision(s) to invest, maintain their investment, and/or recommend investment to others. Notwithstanding this knowledge and awareness, Entrepreneur did not attempt to verify the information received from Agape; at no time did Entrepreneur visit Agape headquarters, meet with its principals or request and/or conduct an examination of Agape's books and records. Instead, Entrepreneur relied exclusively on the information provided by Agape in drawing its conclusions and making its recommendation.
"Had Entrepreneur conducted itself with a minimum of due diligence - such as taking reasonable steps to verify the accuracy and or veracity of the information provided by Agape - it would have found that much of the information provided by Agape was false, misleading, and/or inaccurate, thereby drastically changing Entrepreneur's conclusions as to Agape's strength and security and presumably forcing Entrepreneur to find Agape ineligible for the Hot 100. ...
"In January 2009, after months of financial distress and following the arrest of Agape's Chief Executive Officer, Nicholas Cosmo, it was publicly revealed that Agape was merely an elaborate Ponzi scheme."
Plaintiffs seek damages for gross negligence. They are represented by Eliot Bloom.