According to Damian Williams, the United States Attorney for the Southern District of New York, four people were arrested Thursday and charged with collectively defrauding four professional men’s basketball players out of more than $13 million.
In one scheme, three players were reportedly persuaded to buy more than $5 million worth of life insurance policies at a huge markup. In another, a fourth player spent $7 million to buy a professional women’s basketball team, but prosecutors said the money never went toward a purchase. In the third scheme, a player spent $1 million to fund a player representation agency that never existed, according to the charge.
“These defendants believed that defrauding their professional athlete clients out of millions of dollars would be a lie,” Williams said in a statement. “That was a big mistake and they now face serious criminal charges for their alleged crimes.”
Darryl Cohen, Brian Gilder, Charles Briscoe and Calvin Darden Jr. were each charged with one count of wire fraud and one count of conspiracy to commit wire fraud. Each charge carries a maximum sentence of 20 years in prison.
Cohen, who was formerly a broker at Morgan Stanley, was also charged with investment advisor fraud. Briscoe, who was formerly a licensed NBA agent, was also charged with aggravated identity theft.
Cohen, Gilder, Briscoe and Darden could not be reached for comment, and the court documents did not list attorneys for any of them. Brandon Reif, an attorney who previously represented Cohen, did not immediately respond to a request for comment Thursday.
In a statement, Morgan Stanley, where Cohen worked from 2015 to 2021, said he was “terminated” in March 2021 and has since been banned from the securities industry. “We have fully cooperated with the investigation and have resolved customer claims related to Mr. Cohen,” a company spokeswoman said.
The U.S. Securities and Exchange Commission also filed a civil complaint against Cohen.
The identities of the professional athletes alleged by prosecutors have not been released. But many of the life insurance details seem to line up with the claims of Jrue and Lauren Holiday, Chandler Parsons and Courtney Lee, who previously described allegations of fraud by Cohen to The New York Times.
Jrue Holiday plays for the Milwaukee Bucks of the NBA and Lauren Holiday, his wife, is a former professional football player. Parsons and Lee are former NBA players. They all said they had filed claims against Cohen with the Financial Industry Regulatory Authority, which oversees brokerage firms.
According to the indictment, between about 2017 and 2020, Cohen and Gilder induced three NBA players to buy about $6.2 million worth of life insurance policies, from which Cohen and Gilder “secretly benefited” from about $4.5 million. Cohen reportedly gave about $200,000 of the money to a person he had a romantic relationship with and used the other funds to pay off a former professional baseball player who threatened to sue him, to pay off his credit card bill and to go home, prosecutors said.
Another plan involved the purchase of a professional women’s basketball team, the indictment said. An NBA player had wanted to buy the team, but the NBA collective bargaining prohibited him from doing so.
The player discussed an “arrangement” with Briscoe, Darden and others whereby the player would buy the team indirectly through a company controlled by one of Darden’s relatives, prosecutors said. The player transferred $7 million to a bank account controlled by Darden to buy the team. But instead, prosecutors said, Darden transferred more than $1 million to Briscoe and more than $500,000 to a family member, then spent the rest on cryptocurrencies, a house, luxury cars, art and a piano.
Cohen, Briscoe and Darden are also charged with defrauding an NBA player who wanted to start a player representation agency he would run after he retired, according to court documents. The player gave Briscoe $1 million so that the agency could pay the costs involved in signing a touted prospect. But prosecutors said the prospect never signed with the agency and that the alleged contract he signed was forged. The money was allegedly transferred to Briscoe, who, according to the indictment, paid off a debt and gave part of it to Darden.