Jrue Holiday, guard for the Portland Trail Blazers, has been victimized by fraudulent actions of former Morgan Stanley investment advisor Darryl Cohen, who was convicted by a Manhattan jury on charges of wire fraud and investment advisor fraud. The jury’s decision came after prosecutors from the Southern District of New York revealed that Cohen orchestrated a scheme to defraud Holiday and other players, including former NBA athletes Chandler Parsons and Courtney Lee, out of more than $5 million.
Cohen misused his position as a trusted advisor, leading the players into purchasing life insurance policies at substantial markups. Specifically, he arranged for these policies, valued at a total of $1.7 million, to be sold for an inflated sum of $6.2 million, pocketing the difference along with his co-conspirators.
Moreover, Cohen diverted around $500,000 from the players’ accounts under the pretense of making charitable donations to a nonprofit organization related to basketball. Unbeknownst to the players, the funds were actually used to construct athletic training facilities on Cohen’s personal property. He misled them by claiming that their contributions were benefiting underprivileged kids and future prospects, while simultaneously utilizing their money to settle debts with other clients who had raised concerns about their investments.
Despite Cohen’s defense arguing that the players had approved some transactions and that the case did not appropriately belong in the Southern District of New York, U.S. District Judge Vernon S. Broderick rejected these claims. Cohen was ultimately acquitted of a third charge regarding conspiracy due to a hung jury.
Now facing potential sentencing of up to 20 years in prison, Cohen has the option to appeal his conviction to the U.S. Court of Appeals for the Second Circuit. This case ties back to previous fraudulent schemes in the sports world, notably involving Calvin Darden Jr., who was sentenced in 2022 to over 12 years in prison for defrauding another NBA star, Dwight Howard, out of $8 million. Darden deceived Howard with promises regarding the purchase of the WNBA’s Atlanta Dream, while instead misappropriating the funds for personal luxuries.
The conviction of Cohen offers a significant reminder of the potential risks athletes face with their investments and financial advisors, highlighting the importance of vigilance and transparency in financial dealings.