Registered investment advisor Darryl Cohen has been charged with defrauding NBA player Jrue Holiday and others.
According to a press release from the U.S. Attorney’s Office for the Southern District of New York, Cohen and accountant Brian Gilder persuaded Holiday and former NBA players Chandler Parsons and Courtney Lee to purchase viatical life insurance policies at inflated prices. Cohen allegedly concealed that Gilder controlled the law firm he selected to purchase the policies, which he then sold to the athletes at markups of 244% for Holiday, 222% for Parsons and 310% for Lee, per the release.
A large portion of the profits was then allegedly used by Cohen and Gilder on personal expenses. This included nearly $178,462 for Cohen’s home and pool, nearly $67,500 to pay a credit card bill, and nearly $200,000 transferred to an individual with whom Cohen was romantically involved, the press release noted. Additional claims included the transfer of $500,000 in funds from Parsons’ and Lee’s accounts and the subsequent use of nearly $238,000 of that to build an athletic gym in his yard. However, the use of the funds was framed as a donation to non-profit Beast Basketball, but this was also allegedly never approved by Parsons and Lee, according to the release.
Parsons addressed the transaction with Cohen, and his text response said the donation was to help “a lot of future prospects and a lot of underprivileged kids,” the release noted.
Cohen also used nearly $328,125 of Parsons’ money to pay Nyjer Morgan, a former basketball player and client, according to the release. Morgan had reached out to Cohen and allegedly made it clear he wanted his funds returned after concerns about investments and loans Cohen had made for him, per the release.
Cohen messaged Gilder in February 2020, “We gotta send [Morgan] more to get rid of him,” the press release noted.
Parsons did not approve the use of his funds to pay Morgan, it reported.
“Financial Advisor Darryl Cohen built trust with successful pro athletes—then betrayed it, stealing their money to fund personal luxuries, including a state-of-the-art gym in his own backyard,” said U.S. Attorney Jay Clayton, in the press release. “New Yorkers deserve honest financial advice—not advisors who scheme to steal clients’ funds, rather than protect their financial interests—and this Office is committed to removing bad actors from our markets.”
On Tuesday, March 3, Cohen was convicted of one count of wire fraud, facing up to 20 years in prison, in addition to a separate five-year sentence for one count of investment adviser fraud, according to the release.
