A former Morgan Stanley financial adviser was convicted of federal fraud charges for cheating three NBA stars out of $5 million — using some of the money to built a state-of-the-art gym in his backyard.
Darryl Cohen, 52, duped three current and past pro hoopsters — Jrue Holiday, Chandler Parsons and Courtney Lee — into buying specialized life insurance policies at astronomical markups as high as 310% so he could split the proceeds with an accountant pal, federal prosecutors in Manhattan said Wednesday.
According to the feds, Cohen not only plunked down $238,000 to a nonprofit to build him the backyard gym, but also used the money for work on his swimming pool and gave $200,000 to his lover.
“Financial Advisor Darryl Cohen built trust with successful pro athletes—then betrayed it, stealing their money to fund personal luxuries, including a state-of-the-art gym in his own backyard,” Jay Clayton, US Attorney for the Southern District of New York, said in a statement.
“New Yorkers deserve honest financial advice—not advisors who scheme to steal clients’ funds, rather than protect their financial interests—and this office is committed to removing bad actors from our markets,” Clayton said.
Cohen was registered adviser with Morgan Stanley from 2015 until he was fired in 2021 according to his BrokerCheck profile. He was indicted on fraud charges in 2023 with three others implicated in a scheme to cheat National Basketball Association players.
In his case, Cohen and accountant Brian Gilder, were charged with convincing Holiday, Parsons and Lee to buy viatical settlement life insurance — a specialized form of investment that allows individuals with limited life expectancy to sell the policies for a discounted lump-sum payment.
But they sold them the policies at markups ranging from 222% to 310%, the feds said, with Cohen also using some of the proceeds to pay off his credit card, according to prosecutors.
This week, a federal jury found him guilty of wire fraud, which carries a maximum prison sentence of 20 years, and investment adviser fraud, which has a max sentence of five years, prosecutors said.
Gilder previously pleaded guilty earlier to wire fraud conspiracy.
