Feds Demand Convicted Con Man Serve 30 Years

April 30, 2012

ABC News on April 30, 2012 released the following:

“By PAUL ELIAS Associated Press

Federal prosecutors are demanding that a man they call a “congenital liar and serial fraudster” serve 30 years in prison and pay a $60 million fine after a jury convicted him of defrauding actors Danny Glover, Harry Belafonte and others out of more than $35 million.

If U.S. District Judge Charles Breyer agrees to the sentence on Monday, it would represent one of the harshest penalties ever meted out in a white collar case. Not even Jeff Skilling, the architect of Enron Corp.’s criminal collapse, was sentenced to that much prison time. Skilling is currently serving a 24-year, four-month sentence.

Assistant U.S. attorneys W. Douglas Sprague and Hallie Mitchell argue in court papers that the harsh sentence is warranted because of the financial and emotional toll the fraud had on the victims, the extent Samuel “Mouli” Cohen went to cover up his scam and his refusal to accept responsibility.

“This unrepentant con man with a militant lack of responsibility has blamed everyone—the victims, the Court, his attorneys, the government, the Probation Officer, and the Court reporter—for his actions and their consequences except the person responsible for it,” prosecutors write in a court filing.

Most notably, Cohen’s fraud caused the collapse of the Vanguard Public Foundation, a nonprofit launched in 1972 that awarded grants to a vast array of social causes. Many of Cohen’s victims, including Glover and Belafonte, were associated with the foundation, which supported anti-war causes, environmental groups and other politically liberal issues. Prosecutors said Cohen even preyed on his father-in-law, looting his retirement account.

A federal jury in November convicted Cohen of 15 counts of wire fraud, 11 counts of money laundering and three counts of tax evasion after a three week trial in San Francisco federal court. His lawyer said Cohen will appeal the conviction.

Cohen, 53, is a son of Russian immigrants who was raised in Jerusalem. He moved to the United States in 1987 and became a United States citizen, though prosecutors allege he falsely told victims that the first President Bush personally granted him citizenship.

Cohen was convicted of falsely telling investors beginning in 2002 that a company he launched called Ecast that made electronic jukeboxes for bars was about to be acquired by Microsoft Corp. Prosecutors said Cohen kept the scheme going by soliciting more money from victims with complaints that U.S. and then European regulators were holding up the deal, which required additional investments to pay nonexistent fees and bonds needed to push the deal to approval.

Prosecutors say none of that was true. Instead, they said Cohen used the millions to fund an “absurd lifestyle” that included helping his wife publish a cookbook called “The Kosher Billionaire’s Secret Recipe.”

Prosecutors allege that he jetted around the country in a rented private jet that he to claim to have owned, giving rides to the likes of singer Elton John and actress Jennifer Lopez, neither of which are included on the victims list.

Prosecutors say that Cohen rented a mansion in the wealthy enclave of Belvedere just north of San Francisco and decorated the house with copies of famous paintings from Picasso, Miro and Matisse and other noted artists. But prosecutors said he solicited investments during parties at his house, which he told victims he owned while showing them the artwork he deemed were originals. Prosecutors said that was all part of a ruse to portray himself as a wealthy and savvy businessman.

Cohen’s attorney is asking for a sentence of less than nine years.

“A 30 year sentence is excessive for a 53-year old first-time offender, who has a long history of selfless acts and entrepreneurial innovation,” Cohen’s attorney Marcus S. Topel wrote in a court filing, pointing out that his client has donated at least $2 million to charity.”


Douglas McNabb – McNabb Associates, P.C.’s
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Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

California Entertainment Business Owner Charged with Alleged $30 Million Scheme

August 12, 2010

A federal grand jury in San Francisco indicted Samuel Cohen (a/k/a Mouli Cohen), previously of Belvedere, California, on 19 counts of wire fraud and 13 counts of money laundering, United States Attorney Joseph P. Russoniello announced.

The indictment alleges that in late 2002, Cohen advised Hari Dillon, the President of Vanguard Public Foundation (Vanguard), that Microsoft was going to acquire Cohen’s company, Ecast. Ecast was a company based in San Francisco and in the business of providing digital music, games, entertainment, and information to bars and nightclubs. Allegedly, in order to obtain money from investors and lenders, Cohen represented that upon completion of the acquisition, Cohen’s Ecast shares would be exchanged on a 1-for-1 basis for Microsoft shares of stock, which were valued at several times the value of Ecast shares. It is also alleged that Cohen represented that Microsoft’s acquisition of Ecast would be finalized within months of late 2002 and offered to sell his Ecast shares to Dillon and other investors associated with Vanguard at prices ranging from $2 to $3.50 per share. Cohen supposedly advised Dillon and other investors that Microsoft’s acquisition of Ecast required approval of governmental regulatory entities in the United States and the European Union (EU). Allegedly, Cohen told Dillon and other investors that they needed to pay Cohen millions of dollars in order to cover costs associated with the government approval of Microsoft’s acquisition of Ecast, and that if Cohen did not receive the money from the investors to cover the costs, they would lose their investments. According to the indictment, Cohen’s scheme began in 2002 and lasted through 2008.

It is important to remember that the allegations in the indictment present only a one-sided story from the government. In order for a grand jury to indict an individual, the government only needs to present it’s case and is not required to show any evidence. The grand jury is swayed by the government’s supposed facts, and is not allowed to hear from the individual.

Further, if Cohen was alleging to these investors that Microsoft was going to buy Ecast in late 2002, how could the fraud have lasted until 2008? Why didn’t the investors report this sooner if they in fact were concerned with being defrauded of their investments? It seems that the government has tacked on additional counts from subsequent years in order to secure a conviction.

Federal agents arrested Cohen on August 5. He made his initial appearance in federal court the following day, in Los Angeles. The grand jury returned the indictment against Cohen on July 15, 2010. The indictment was unsealed the day of Cohen’s arrest. According to court documents, Cohen defrauded more than 55 victims out of more than $30 million as a result of his scheme.

According to the U.S. Congress, the maximum statutory penalty for each count of wire fraud, in violation of Title 18, United States Code, Section 1343, is 20 years in prison, a fine of $250,000, and restitution. The maximum statutory penalty for each count of money laundering, in violation of Title 18, United States Code, Section 1957, is 10 years in prison and a fine of $250,000.

The Sentencing Guidelines present a framework which a court is not obligated to follow, but most of the time the court will. Further, even if Cohen is acquitted of most of the counts of wire fraud and money laundering, the judge will still be allowed to consider those bad acts at the time of sentencing, which unfortunately will result in a higher sentence.

Douglas McNabb and other members of the firm practice and write extensively on matters involving Federal Criminal Defense, Interpol Litigation, International Extradition and OFAC Litigation.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.

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