Courtney Lee #5 and Chandler Parsons #25 of the Houston Rockets come collectively throughout their recreation at Staples Middle on April 6, 2012 in Los Angeles, California.
Andrew D. Bernstein | Nationwide Basketball Affiliation | Getty Photos
Former Morgan Stanley advisor Darryl Cohen was arrested on Thursday morning for allegedly defrauding present and former NBA gamers together with Jrue Vacation, Chandler Parsons and Courtney Lee.
Cohen is charged with one depend of conspiracy to commit wire fraud and one depend of wire fraud, in line with federal prosecutors. Every depend carries as much as a 20-year jail sentence. He’s additionally going through funding advisor fraud costs, which carry a most five-year jail sentence. Three others, together with former NBA gamers agent Charles Briscoe, have been additionally charged.
Within the indictment, which was unsealed on Thursday, the Justice Division alleged that Cohen and the others engaged in fraud schemes to switch roughly $13 million from NBA shoppers for private makes use of. The DOJ famous that $7 million of that was allegedly misappropriated solely by Briscoe and Calvin Darden Jr., who has beforehand pleaded responsible to separate wire fraud costs.
The gamers weren’t named within the DOJ’s announcement. Their identities have been confirmed by an individual conversant in the matter, who declined to be recognized given the delicate nature of the case.
The DOJ claimed that Cohen and his alleged co-conspirators induced the three shoppers to buy overpriced life insurance coverage insurance policies that Cohen later used to do renovations on his dwelling and pool, in addition to repay his bank card payments and provides cash to a romantic associate.
Prosecutors additionally alleged that Cohen directed the basketball gamers to provide donations to a nonprofit, which he in the end used to construct athletic amenities in his yard.
“These defendants believed that defrauding their skilled athlete shoppers of hundreds of thousands of {dollars} can be a layup. That was an enormous mistake, and so they now face severe felony costs for his or her alleged crimes,” stated Damian Williams, the U.S. Lawyer for the Southern District of New York, in a Thursday announcement.
Cohen was an advisor for Morgan Stanley from 2015 to 2021, in line with his Monetary Trade Regulatory Authority profile. The DOJ stated in its indictment doc that the alleged fraud schemes befell from roughly 2017 to 2020. Morgan Stanley fired Cohen in 2021 for “transactions not disclosed to or accepted by Morgan Stanley and use of an unapproved platform to interact in inappropriate communications with shoppers,” in line with FINRA filings.
“We absolutely cooperated with the investigation and have resolved shoppers’ claims associated to Mr. Cohen,” Morgan Stanley stated in an announcement. “Mr. Cohen was terminated from the Agency in March 2021 and has since been barred from the securities trade by FINRA.”
The Securities and Alternate Fee additionally charged Cohen on Thursday for allegedly defrauding Vacation, Parsons and Lee out of over $1 million.
Cohen’s lawyer, Brandon Reif, didn’t instantly reply to a request for remark.
The three basketball gamers had beforehand filed claims in opposition to Morgan Stanley with FINRA. These instances have been later settled. Phil Aidikoff, who represented Vacation, Parsons and Lee, declined to remark as a result of confidentiality agreements within the FINRA settlements.
Correction: This story was up to date to mirror that there have been a number of alleged schemes leading to a complete $13 million of fraud.
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