Courtney Lee #5 and Chandler Parsons #25 of the Houston Rockets meet during a game at the Staples Center on April 6, 2012 in Los Angeles, California.
Andrew D. Bernstein | National Basketball Association | Getty Images
former Morgan Stanley Advisor Darryl Cohen was arrested Thursday morning on suspicion of defrauding current and former NBA players, including Jules Holiday, Chandler Parsons and Courtney Lee.
Cohen is charged with one count of conspiracy to commit wire fraud and one count of wire fraud. According to federal prosecutorsEach count carries a maximum sentence of 20 years in prison. He also faces investment adviser fraud charges that carry a maximum sentence of his five years in prison. Three others were also charged, including the former NBA player’s agent Charles Briscoe.
in the indictmentopened Thursday, the Department of Justice alleges Cohen and others were involved in a fraudulent scheme to transfer about $13 million from NBA clients for personal use. $10,000 is said to have been embezzled only by Briscoe and Calvin Durden Jr.
The DOJ announcement did not reveal the player’s name. Their identities were confirmed by a person familiar with the matter who declined to be identified given the sensitive nature of the case.
The DOJ alleged that Cohen and his alleged co-conspirators induced three customers to purchase overpriced life insurance policies.
Prosecutors also alleged that Cohen directed the basketball player to donate to a non-profit organization, which he eventually used to build an exercise facility in his backyard.
“These defendants believed defrauding clients of professional athletes of millions of dollars would constitute a layup,” New York, in a statement Thursday.
Cohen served as an advisor to Morgan Stanley from 2015 to 2021, he said. Financial industry regulator profileDOJ said in its indictment that the alleged fraud scheme took place from approximately 2017 to 2020. Morgan Stanley fired Cohen in 2021 for “engaging in transactions not disclosed or approved by Morgan Stanley and improperly communicating with clients using an unapproved platform.” ,” according to FINRA filings.
“We have cooperated fully with the investigation and have resolved the client’s allegations relating to Mr. Cohen,” Morgan Stanley said in a statement. “Mr Cohen was fired from the firm in March 2021 and subsequently barred from the securities industry by FINRA.”
Securities and Exchange Commission was also charged Cohen allegedly swindled Holliday, Parsons, and Lee out of more than $1 million.
Cohen’s attorney, Brandon Leaf, did not immediately respond to a request for comment.
The three basketball players had previously filed lawsuits against Morgan Stanley in FINRA. These cases were later settled. Phil Aidikoff, his representative for Holiday, Parsons and Lee, declined to comment due to confidentiality agreements in the FINRA settlement.
Correction: This article has been updated to reflect that there were multiple schemes leading to a total of $13 million in fraud.
