A jury in federal court in Manhattan on Tuesday found former Morgan Stanley broker Darryl M. Cohen guilty of defrauding three former professional basketball players out of millions of dollars through unauthorized transfers and overcharges on life settlement investments.
Cohen, who was arrested in March 2023, was convicted of wire fraud and investment advisor fraud, according to media reports and a lawyer representing the victims. The judge presiding over the month-long trial declared a mistrial for a third charge of conspiracy after the jury, which began deliberating on Friday, failed to reach a unanimous verdict.
Prosecutors alleged that from 2017 to 2020, Cohen “orchestrated” a scheme along with an independent financial planner to steal from three pro athlete customers through sales of life settlement policies at inflated prices of as much as 310%, according to court documents.
The planner’s firm made a $4.5 million profit while Cohen took in $246,000 in undisclosed kickbacks, according to prosecutors. The court cast included testimony from former NBA players Chandler Parsons, Jrue Holiday and Courtney Lee, according to Law360.
Cohen also individually stole $500,000 by wiring money from advisory accounts of two of the customers to an amateur basketball league and then using some of those funds to pay for construction of a home gym in his backyard, according to prosecutors and allegations in a civil case brought by the Securities and Exchange Commission.
The now-barred broker wired another $328,125 from one of the customer’s accounts to a fourth athlete to repay him after he complained about missing funds, the DOJ said.
