Courtney Lee #5 and Chandler Parsons #25 of the Houston Rockets come in combination all through their recreation at Staples Heart on April 6, 2012 in Los Angeles, California.
Andrew D. Bernstein | Nationwide Basketball Affiliation | Getty Pictures
Former Morgan Stanley guide Darryl Cohen was once arrested on Thursday morning for allegedly defrauding present and previous NBA avid gamers together with Jrue Vacation, Chandler Parsons and Courtney Lee.
Cohen is charged with one depend of conspiracy to devote twine fraud and one depend of twine fraud, in keeping with federal prosecutors. Every depend carries as much as a 20-year jail sentence. He’s additionally dealing with funding guide fraud fees, which raise a most five-year jail sentence. 3 others, together with former NBA avid gamers agent Charles Briscoe, had been additionally charged.
Within the indictment, which was once unsealed on Thursday, the Justice Division alleged that Cohen and the others engaged in fraud schemes to switch kind of $13 million from NBA shoppers for private makes use of. The DOJ famous that $7 million of that was once allegedly misappropriated best by way of Briscoe and Calvin Darden Jr., who has prior to now pleaded accountable to split twine fraud fees.
The avid gamers were not named within the DOJ’s announcement. Their identities had been showed by way of an individual accustomed to the topic, who declined to be recognized given the delicate nature of the case.
The DOJ claimed that Cohen and his alleged co-conspirators brought about the 3 shoppers to buy overpriced existence insurance coverage insurance policies that Cohen later used to do renovations on his house and pool, in addition to repay his bank card expenses and provides cash to a romantic spouse.
Prosecutors additionally alleged that Cohen directed the basketball avid gamers to present donations to a nonprofit, which he in the long run used to construct athletic amenities in his yard.
“Those defendants believed that defrauding their skilled athlete shoppers of thousands and thousands of greenbacks can be a layup. That was once an enormous mistake, and so they now face critical felony fees 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 once an guide for Morgan Stanley from 2015 to 2021, in keeping with his Monetary Business Regulatory Authority profile. The DOJ mentioned in its indictment report that the alleged fraud schemes came about from kind of 2017 to 2020. Morgan Stanley fired Cohen in 2021 for “transactions now not disclosed to or licensed by way of Morgan Stanley and use of an unapproved platform to have interaction in irrelevant communications with shoppers,” in keeping with FINRA filings.
“We absolutely cooperated with the investigation and feature resolved shoppers’ claims associated with Mr. Cohen,” Morgan Stanley mentioned in a commentary. “Mr. Cohen was once terminated from the Company in March 2021 and has since been barred from the securities business by way of 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 attorney, Brandon Reif, didn’t right away reply to a request for remark.
The 3 basketball avid gamers had prior to now filed claims in opposition to Morgan Stanley with FINRA. The ones circumstances had 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 tale was once up to date to replicate that there have been more than one alleged schemes leading to a complete $13 million of fraud.