Damian Williams, United States Lawyer for the Southern District of New York, and Michael J. Driscoll, Deputy Director in Cost of the Federal Bureau of Investigation’s (FBI) New York Area Workplace, introduced the unsealing of a lawsuit. on six counts. Indictment charging DARRYL COHEN, BRIAN GILDER, CHARLES BRISCOE and CALVIN DARDEN, JR. as a part of two schemes to defraud skilled basketball gamers. COHEN and GILDER had been arrested this morning in Chatsworth, Calif., and North Ridge, Calif., respectively, and can seem in court docket later at present in the US District Court docket for the Central District of California. BRISCOE was arrested this morning in Katy, Texas and can seem in the US District Court docket for the Southern District of Texas later at present. Darden, JR. was arrested this morning in Atlanta, Georgia, and can seem in the US District Court docket for the Northern District of Georgia later at present.
US Lawyer Damian Williams mentioned: As alleged within the indictment, these defendants believed defrauding their skilled athlete shoppers of thousands and thousands of {dollars} could be a layup. It was an enormous mistake, and so they now face critical felony expenses for his or her alleged crimes.
FBI Deputy Director Michael J. Driscoll mentioned: As alleged, the defendants engaged in schemes to defraud 4 skilled basketball gamers of over $13 million. Right this moment’s actions ought to serve for example to others who interact in felony exercise to serve their very own grasping monetary wishes on the expense of others. The FBI guarantees to deliver you to justice.
As alleged within the Indictment:[1]
COHEN and GILDER
From no less than 2017 or circa 2020 or circa 2020, COHEN, a Registered Funding Advisor, orchestrated a scheme to defraud three totally different skilled basketball shoppers (Athlete-1, Athlete-2, and Athlete-3, respectively) totaling greater than $5 million by leveraging its advisory and fiduciary relationships with these shoppers. COHEN conspired with BRIAN GILDER, an unbiased monetary planner whom COHEN inspired his shoppers to work with and who assisted within the preparation of Athlete-1, -2 and -3 returns.
First, COHEN and GILDER fraudulently enticed Athletes-1, -2, and -3 to buy viatical life insurance coverage insurance policies at large margins. COHEN and GILDER didn’t disclose that GILDER organized for an alleged legislation agency (Legislation Agency-1) that he managed to purchase the insurance policies after which promote them to the athletes at markups of 222%, 310 % and 244%, respectively. . Certainly, Legislation Agency-1 made roughly $4.5 million in earnings from the sale of the insurance policies to athlete shoppers of COHEN and GILDER. COHEN and GILDER used a considerable portion of those illicit proceeds to pay for their very own private bills. Particularly: (i) GILDER used roughly $257,479 of the funds to repay a mortgage he owed; (ii) COHEN used roughly $178,462 of the funds to renovate his house and carry out work on his swimming pool; (iii) COHEN used roughly $67,500 of the funds to pay his private bank card invoice; and (iv) COHEN transferred roughly $200,000 of the funds to an individual with whom he had a romantic relationship.
Second, COHEN ordered that $500,000 be transferred from the accounts of Athletes-2 and -3 as purported donations to a non-profit group. COHEN then used about $238,000 of the funds allegedly donated to the nonprofit to construct athletic coaching services within the yard of his house. Athletes-2 and -3 have by no means approved transfers of their funds to the ASBL. When Athlete-2 confronted COHEN concerning the donations, COHEN informed Athlete-2 in a textual content message, in substance and partially, that Athlete-2’s cash had [h]supplied a number of prospects and a number of deprived kids. COHEN didn’t speak in confidence to Athlete-2 {that a} substantial portion of Athlete-2’s donations had, actually, been used to construct an athletic coaching facility in COHEN’s yard.
Third, COHEN and GILDER used a sports activities company and one other legislation agency to funnel roughly $328,125 of Athlete-2’s cash to reimburse a former skilled baseball participant (Athlete-4), who was a disgruntled buyer of the COHENs. Athlete-4 had raised issues with COHEN concerning the investments and loans COHEN had made on Athlete-4’s behalf and demanded to be reimbursed. On or about February 19, 2020, within the midst of funds of Athlete-2’s cash to Athlete-4, COHEN despatched a message to GILDER, We should ship [Athlete-4] extra to do away with him. Athlete-2 didn’t authorize funds in his account for use to repay money owed owed by COHEN to Athlete-4.
BRISCOE and DARDEN, JR.
BRISCOE and DARDEN, JR. additionally defrauded skilled basketball gamers. BRISCOE was an NBA agent, and DARDEN, JR. beforehand pleaded responsible to wire fraud within the Southern District of New York.
BRISCOE was the sports activities agent of knowledgeable basketball participant (Athlete-5). Athlete-5 started discussing the potential of buying knowledgeable ladies’s basketball staff (Crew-1), and BRISCOE launched Athlete-5 to DARDEN, JR. Since Athlete-5 was not eligible to buy Crew-1 as an lively skilled basketball league participant, BRISCOE, DARDEN, JR., and a relative of DARDEN, JR., who serves or has served on the boards of a number of public corporations (Relative -1), mentioned with Athlete-5 an association during which Athlete-5 would not directly buy Crew-1 via of an organization (Firm-1) allegedly managed by Mum or dad-1. BRISCOE offered Athlete-5 with a deck of slides outlining a imaginative and prescient plan for Firm-1’s buy of Crew-1. The imaginative and prescient plan claimed, amongst different issues, that Firm-1 was led by Relative-1 and suggested by a board that included a number of distinguished figures in American sports activities, leisure, and enterprise. In fact and actually, and like BRISCOE and DARDEN, JR. well-known, no less than two of those folks have by no means served as advisors to Firm-1.
Between or round November 2020 and round December 2020, Athlete5 had $7 million transferred to a checking account managed by DARDEN, JR. Athlete-5 understood that these funds had been to ensure that Athlete-5 to buy and develop into full proprietor of Crew-1. In fact and actually, not one of the cash despatched by Athlete-5 was used to buy Crew-1, and Athlete-5 didn’t develop into the proprietor of Crew -1. As an alternative, from round November 2020 to round December 2021, DARDEN, JR. transferred over $1 million of the funds to BRISCOE. Moreover, DARDEN, JR. saved a considerable portion of the funds for himself and family members, sending over $500,000 to a relative and over $400,000 to a cryptocurrency trade for his profit. Darden, JR. additionally used a few of the funds to purchase luxurious items, together with about $880,000 to luxurious automobile producers, greater than $300,000 to artwork galleries, and greater than $100,000 to purchase a piano, amongst others. Darden, JR. additionally spent over roughly $1 million to buy and make enhancements to a residence, together with however not restricted to including a koi pond.
BRISCOE and DARDEN, JR. additionally labored collectively to defraud Athlete-2. BRISCOE, in session with COHEN and GILDER, was supposed to construct a brand new sports activities company (Company-1) funded by Athlete-2. BRISCOE satisfied Athlete-2 that BRISCOE had signed, via Company-1, a extremely touted athlete getting ready for knowledgeable basketball draft (Athlete-6). In reality, Athlete-6 had not signed with both BRISCOE or Company-1. As an alternative, BRISCOE cast the signatures of Athlete-6 and Athlete-6’s mom on a player-agent contract and despatched that cast contract to Athlete-2. BRISCOE then ordered Athlete-2 to switch $1 million to BRISCOE as a mortgage to Athlete-6 whereas Athlete-6 ready for draft. In reality, Athlete-6 by no means had a dialog with BRISCOE or DARDEN, JR. about signing with BRISCOE or receiving a $1 million mortgage, and Athlete-6 by no means acquired a portion of the $1 million mortgage. As an alternative, BRISCOE used roughly $306,642 of the funds transferred by Athlete-2 to repay a debt that BRISCOE had personally incurred and likewise transferred roughly $544,000 to a checking account managed by DARDEN, JR.
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COHEN, 49, of Chatsworth, Calif., and Las Vegas, Nevada, GILDER, 49, of North Ridge, Calif., BRISCOE, 35, of Katy, Texas, and DARDEN, JR. 49, of Atlanta, Georgia, is every charged with one rely of conspiracy to commit wire fraud and one rely of wire fraud. Every rely carries a most sentence of 20 years in jail. COHEN can also be charged with one rely of funding adviser fraud, which carries a most sentence of 5 years in jail, and BRISCOE can also be charged with one rely of aggravated impersonation, which carries a most sentence of as much as 5 years in jail. obligatory two-year imprisonment.
The utmost potential sentences are prescribed by Congress and are offered right here for informational functions solely, as any sentencing of defendants can be decided by a decide.
Mr. Williams praised the exceptional work of the FBI. Mr. Williams additionally thanked the US Lawyer’s Places of work for the Central District of California, the Northern District of Georgia and the Southern District of Texas for his or her help within the investigation. Mr. Williams additionally thanked the US Securities and Trade Fee, which at present filed a parallel civil motion towards COHEN, for its help and cooperation on this investigation.
The case is being prosecuted by the bureaus Complicated Fraud and Cybercrime Unit. Assistant U.S. Attorneys Katherine Reilly and Kevin Mead are charged with the prosecution.
The counts within the indictment are expenses solely and the accused are presumed harmless till confirmed responsible.
[1] Because the introductory sentence signifies, the complete textual content of the Indictment and the outline of the Indictment set forth therein are allegations solely, and every reality set forth therein have to be addressed. as an allegation.
