Federal authorities arrested and charged four men, including a barred ex-Morgan Stanley broker and an independent financial planner, with stealing over $13 million from four professional basketball players.
The Department of Justice unsealed a six-count
"These defendants believed that defrauding their professional athlete clients of millions of dollars would be a layup. That was a huge mistake," Damian Williams, U.S. Attorney for the Southern District of New York, said in a statement accompanying the indictment.
The Securities and Exchange Commission
An anonymous former broker at Morgan Stanley
Asked Friday if the unnamed broker in the Los Angeles case is Cohen and if he could comment on these charges, Brandon Reif, a lawyer for Cohen, said "I've got to check with my client" and did not comment further.
Cohen was fired from Morgan Stanley and
"We fully cooperated with the investigation and have resolved clients' claims related to Mr. Cohen. Mr. Cohen was terminated from the Firm in March 2021 and has since been barred from the securities industry by FINRA," a spokesperson for Morgan Stanley said in an email.
Cohen allegedly conspired with Gilder, an independent financial planner in the North Ridge neighborhood of Los Angeles, to sell viatical life insurance at immense markups to three athlete clients and cheat them out of over $5 million. The two then allegedly spent the money on paying funds owed to another client of Cohen's, and personal expenses including a mortgage, house repairs, a swimming pool and a romantic relationship.
Cohen also transferred around $500,000 of two clients' funds, without their permission, to a fake "nonprofit" that he told one of them had "helped a lot of future prospects and a lot of underprivileged kids." Cohen spent around $238,000 of the funds "to build athletic training facilities in the backyard of his home," the DOJ release said.
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In another scheme, National Basketball Association agent Briscoe allegedly conspired with Darden, Jr., described as a "previously convicted fraudster," to defraud an athlete client of around $7 million by claiming to help the client buy a professional women's basketball team. Darden, Jr. instead allegedly paid more than $1 million to Briscoe, then transferred more than $500,000 to a relative and spent the rest on crypto, luxury cars, fine art galleries, a piano, and home improvements including a koi pond.
In addition, Cohen and Gilder allegedly consulted with the NBA agent Briscoe in his plan to trick an athlete client to fund setting up a new sports agency. Briscoe forged a "highly touted" basketball player's signature to make it appear that they had signed that player while they prepared for an upcoming draft through the sham agency, and convinced the client to fund the agency with $1 million as a "loan" which Briscoe and Darden, Jr. then split between themselves.
Each of the four are charged with "one count of conspiracy to commit wire fraud and one count of wire fraud," the DOJ release said. "Each count carries a maximum sentence of 20 years in prison."
Cohen was also charged with one count of investment advisor fraud, and could face up to five years in prison for that, while Briscoe was charged with one count of aggravated identity theft, "which carries a mandatory prison term of two years," the DOJ said.
