It was a deeply personal foul.
A former-Morgan Stanley advisor has been charged with stealing $13 million belonging to six current- and former-NBA players who were his clients, and funneling it into his own pockets and those of a financial advisor, an agent and a convicted fraudster.
Darryl M. Cohen, 49, of Chatsworth, California, is accused of running a wide variety of schemes with the three others involving high-priced life insurance policies, misappropriated charitable donations and a ploy to acquire a WNBA team, in which they all pocketed millions.
All four have been charged with wire fraud and conspiracy and face up to 40 years in prison.
“These defendants believed that defrauding their professional athlete clients of millions of dollars would be a layup. That was a huge mistake, and they now face serious criminal charges for their alleged crimes,” said Damian Williams, the U.S. attorney for the southern district of New York.
Cohen, who had his securities license stripped last year by the Financial Industry Regulatory Authority, after refusing to cooperate with a probe into his activities, was also charged with investment advisor fraud. He was also separately hit with a civil suit by the Securities and Exchange Commission alleging he misappropriated at least $1 million from his NBA clients.
The six players were not named in court papers, but three of them are Jrue Holiday, a two-time all-star with the Milwaukee Bucks, Chandler Parsons, a forward who played with several teams and retired in 2020 after being injured in a car crash, and Courtney Lee, a guard who played for 12 seasons in the NBA, according to an attorney who represented the three players in civil cases brought against Cohen.
The attorney declined to comment on the criminal charges.
An attorney who represented Cohen in the civil cases didn’t immediately respond to a message seeking comment.
The three players reached settlements with Morgan Stanley and had their money returned, according to court filings. In a statement, Morgan Stanley said: “We fully cooperated with the investigation and have resolved clients’ claims related to Mr. Cohen. Mr. Cohen was terminated from the firm in March 2021 and has since been barred from the securities industry by FINRA.”
Prosecutors say that between 2017 and 2020, Cohen conspired with financial planner Brian Gilder, who provided tax services for several of the alleged victims, to steer three of the players into buying hugely-inflated life insurance policies for which they were overcharged by $5 million.
Cohen and Gilder then allegedly used the excess cash to pay off their own mortgages and pay for hundreds of thousands in home improvements. Cohen is also charged with using $200,000 to give to a woman he was having an affair with, federal prosecutors in New York said.
Cohen was also charged with stealing $500,000 from two of the athletes, claiming it would be given to non-profit charities but instead used it to build athletic training facilities in his own backyard.
Cohen and Gilder, 49, of North Ridge, California, also are accused of using $328,000 of one the players’ money to repay a fourth NBA player who they had already stolen from and who had begun complaining about the missing cash. “We gotta send [Athlete-4] more to get rid of him,” Cohen allegedly wrote to Gilder at one point, according to court filings.
In separate but related schemes, prosecutors also charged Charles Briscoe, a 35-year-old NBA agent from Texas, and Charles Darden, Jr., a 49-year-old convicted fraudster who served several stints in prison for fraud, most recently for ripping off lenders in a bid to buy the men’s magazine Maxim in 2013.
In one scheme, the pair conspired to steal $7 million from one of Briscoe’s NBA player clients in an effort to buy a WNBA team. The ploy involved enlisting Darden’s father, a former, high-ranking UPS executive who had served on multiple major corporate boards, to serve as the front man for the purchase.
But prosecutors say that Darden’s father wasn’t involved and that the effort was all a hoax, with the pair using the money to buy cryptocurrency, luxury cars, fine art and a $100,000 piano.
Prosecutors say Briscoe and Darden also conspired with Gilder and Cohen to rip off one of his clients in a phony effort to build a new sports agency. In that scam, prosecutors say Briscoe forged the signature of a highly-touted NBA prospect to make it appear that he had signed with the new agency to entice Cohen’s client to invest.
All four men were arrested on Thursday and had yet to appear in court, and could not immediately be reached for comment. It was not immediately clear if they had yet retained attorneys.