NBA players lost $13 million in an alleged scheme involving an ex-Morgan Stanley advisor

Darryl Cohen, a former Morgan Stanley advisor, was detained on Thursday morning on suspicion of scamming many NBA players, including Jrue Holiday, Chandler Parsons, and Courtney Lee.

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Federal prosecutors accuse Cohen of one count of conspiracy to commit wire fraud and one count of wire fraud. The maximum sentence for each count is 20 years in jail. He is also facing investment advisor fraud charges, which carry a maximum five-year prison sentence. Three others were charged, including former NBA player Charles Briscoe.

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The United Department claimed in the Thursday-unsealed indictment that Cohen and the other defendants used two fraud schemes to steal nearly $13 million from NBA customers for their own benefit. The DOJ's release omitted to name the participants.

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The DOJ alleged that Cohen and his alleged accomplices persuaded the three clients to buy exorbitant life insurance policies. Cohen later used it to pay off credit card debt, make improvements to his home and pool, and give money to a romantic partner.

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Additionally, according to the prosecution, Cohen instructed the basketball players to donate money to a charity. He then used to construct sports facilities in his backyard.

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"These defendants thought stealing millions of dollars from their elite athlete clients would be a layup. They now face substantial criminal charges for their alleged offenses after making that grave error, according to the U.S. In a statement on Thursday, the Southern District of New York's attorney.

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According to his Financial Industry Regulatory Authority profile, Cohen worked as a financial advisor at Morgan Stanley from 2015 until 2021. The alleged fraud schemes, as reported in the DOJ's complaint, are supposed to have taken place between 2017 and 2020. According to FINRA documents, Cohen was fired by Morgan Stanley in 2021 for "transactions not disclosed to or permitted by Morgan Stanley and use of an unapproved platform to engage in illegal interactions with clients."

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Morgan Stanley issued a statement saying, "We fully cooperated with the inquiry and have settled clients' disputes connected to Mr. Cohen." “Mr. Cohen was terminated from the Company in March 2021 and has since been blacklisted from the securities business by FINRA.”

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Moreover, Cohen was accused by the Securities and Exchange Commission on Thursday of scamming Holiday, Parsons, and Lee of more than $1 million.

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An inquiry for comment was not immediately answered by Cohen's attorney, Brandon Reif.

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The three basketball players had already filed complaints to FINRA against Morgan Stanley. Afterward, those cases were resolved. Phil Aidikoff, who represented Holiday, Parsons, and Lee, declined to comment due to confidentiality restrictions in the FINRA settlements.