Courtney Lee #5 and Chandler Parsons #25 of the Houston Rockets come collectively throughout their sport at Staples Heart 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 response to federal prosecutors. Every depend carries as much as a 20-year jail sentence. He’s additionally dealing with funding advisor fraud expenses, 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 purchasers 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 expenses.
The gamers weren’t named within the DOJ’s announcement. Their identities have been confirmed by an individual aware of 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 purchasers to buy overpriced life insurance coverage insurance policies that Cohen later used to do renovations on his residence and pool, in addition to repay his bank card payments and provides cash to a romantic accomplice.
Prosecutors additionally alleged that Cohen directed the basketball gamers to provide donations to a nonprofit, which he in the end used to construct athletic services in his yard.
“These defendants believed that defrauding their skilled athlete purchasers of tens of millions of {dollars} could be a layup. That was an enormous mistake, and so they now face critical prison expenses for his or her alleged crimes,” mentioned Damian Williams, the U.S. Legal professional for the Southern District of New York, in a Thursday announcement.
Cohen was an advisor for Morgan Stanley from 2015 to 2021, in response to his Monetary Business Regulatory Authority profile. The DOJ mentioned in its indictment doc that the alleged fraud schemes occurred 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 purchasers,” in response to FINRA filings.
“We totally cooperated with the investigation and have resolved purchasers’ claims associated to Mr. Cohen,” Morgan Stanley mentioned in a press release. “Mr. Cohen was terminated from the Agency in March 2021 and has since been barred from the securities trade by FINRA.”
The Securities and Trade 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 towards Morgan Stanley with FINRA. These instances have been later settled. Phil Aidikoff, who represented Vacation, Parsons and Lee, declined to remark because of the 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.