Ex-Morgan Stanley advisor charged with defrauding NBA players out of $13 million

cnbc.com:

Former Morgan Stanley advisor Darryl Cohen was arrested on Thursday morning for allegedly defrauding current and former NBA players including Jrue Holiday, Chandler Parsons and Courtney Lee.

Cohen is charged with one count of conspiracy to commit wire fraud and one count of wire fraud, according to federal prosecutors. Each count carries up to a 20-year prison sentence. He is also facing investment advisor fraud charges, which carry a maximum five-year prison sentence. Three others, including former NBA players agent Charles Briscoe, were also charged.

In the indictment, which was unsealed on Thursday, the Justice Department alleged that Cohen and the others engaged in two fraud schemes to transfer roughly $13 million from NBA clients for his personal use. The players weren't named in the DOJ's announcement. Their identities were confirmed by a person familiar with the matter, who declined to be identified given the sensitive nature of the case.

The DOJ claimed that Cohen and his alleged co-conspirators induced the three clients to purchase overpriced life insurance policies that Cohen later used to do renovations on his home and pool, as well as pay off his credit card bills and give money to a romantic partner.

Prosecutors also alleged that Cohen directed the basketball players to give donations to a nonprofit, which he ultimately used to build athletic facilities in his backyard.

«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, in a Thursday announcement.

Cohen was an advisor