A financial advisor has been found guilty of defrauding three professional basketball players, according to an announcement by Jay Clayton, U.S. Attorney for the Southern District of New York. The conviction follows a five-week jury trial before U.S. District Judge Vernon S. Broderick.
“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,” said U.S. Attorney Jay Clayton. “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.”
Evidence presented at trial showed that from 2017 through 2020, Darryl Cohen, a registered investment adviser, ran a scheme targeting three NBA players: Chandler Parsons, Courtney Lee, and Jrue Holiday. The total amount taken from these clients exceeded $5 million.
Cohen and accountant Brian Gilder convinced the athletes to buy viatical life insurance policies at significant markups without disclosing that Gilder’s law firm was profiting from the sales. The law firm made about $4.5 million in profit through these transactions. A large portion of these proceeds went toward Cohen’s personal expenses—including home renovations and paying off credit card debt—as well as transfers to an individual with whom he had a romantic relationship.
Additionally, Cohen arranged for $500,000 to be transferred from Parsons’ and Lee’s accounts as supposed donations to Beast Basketball, a nonprofit organization. Nearly half of this sum was used by Cohen to build an athletic gym at his residence without the knowledge or authorization of the players. When confronted by Parsons about the donation, Cohen told him in a text message that his money had “[h]elped a lot of future prospects and a lot of underprivileged kids.” He did not disclose that much of the donation funded construction at his own home.
The scheme also involved using another sports agency and law firm to transfer over $328,000 from Parsons’ account in order to repay Nyjer Morgan—a former professional baseball player and client—who had demanded repayment for investments managed by Cohen. This transfer was done without Parsons’ approval.
Cohen, age 52 and residing in Chatsworth, California, was convicted on one count each of wire fraud and investment adviser fraud. Wire fraud carries up to 20 years in prison; investment adviser fraud has a maximum sentence of five years. Sentencing will be determined by Judge Broderick at a later date.
Jay Clayton commended the work of the Federal Bureau of Investigation on this case and thanked several other U.S. Attorney’s Offices for their assistance during the investigation. He also acknowledged cooperation from the U.S. Securities and Exchange Commission (SEC), which filed a parallel civil action against Cohen.
The prosecution is being handled by Assistant U.S. Attorneys Kevin Mead, Brandon Thompson, and William Kinder from the Complex Frauds and Cybercrime Unit.
