Justice gavel court law book judge 311.
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SAN FRANCISCO – American- Israeli hi-tech executive Samuel “Mouli” Cohen
received one of the harshest sentences ever meted out in a white-collar crime
case on Monday, for having defrauded victims of approximately $31
Found guilty on 29 of 35 counts of wire fraud, money laundering
and tax evasion in November 2011, Cohen was sentenced in the United States
District Court for the Northern District of California to 22 years in
The fraud he perpetrated led to the collapse of the Vanguard
Public Foundation, a privately funded non-profit civil rights and social justice
organization with ties to actor Danny Glover and singer Harry Belafonte. Cohen
of soliciting investments between 2002 and 2008 from 50
individuals, most of them associated with Vanguard, and falsely claiming that
Microsoft was poised to acquire Ecast, the electronic jukebox company of which
he was co-founder and CEO.
Cohen lied to investors, telling them that
once Ecast was acquired, its shares would be exchanged on a 1-for-1 basis with
According to a press statement from Melinda Haag, US
attorney for the Northern District of California, “Cohen falsely represented
that this investment would provide an opportunity for the investors to
contribute a substantial amount of the profits to the Vanguard Public Foundation
He also falsely told investors that both a US
governmental regulatory agency and the EU required payment of costs associated
with their review and approval of the acquisition.
He extracted payment
for this from his investors, warning them that they would lose their shares if
they did not cover the costs. He falsely assured them that larger investors,
including Silicon Valley venture capital firms, were also invested and paying
their pro-rata share of these bonds and fees.
Prosecutors had asked the
court to sentence Cohen to 30 years in prison. “The nature and
circumstances of defendant’s offenses of conviction – multiple counts each of
wire fraud, money laundering and tax evasion – warrant an extremely severe
sentence,” they wrote
in their sentencing memo to the court. “Defendant set the
stage for his fraud schemes by manufacturing an elaborate charade to depict
himself as a successful businessman so his victims would be more likely to part
with money. He pretended to have the means and the genuine interest to help
those less fortunate than he, and then he used a scheme he had practiced on
other victims to attack a non-profit organization and its donors. Instead of
going to help those in need, these victims’ tens of millions went to [the]
defendant, who proceeded to spend the millions on a lifestyle remarkable for its
The now-54-year-old Cohen is the son of Russian immigrants to
Israel who raised him in poor circumstances in Jerusalem. He reportedly became a
US citizen after arriving here in 1987. Prosecutors alleged that Cohen used
of the total out of which he had bilked Vanguard and other investors
to jet around the country in a private plane, giving rides to celebrities like
singer Elton John and actresssinger Jennifer Lopez.
He made it seem that
he was a successful and wealthy businessman by renting a mansion in the
exclusive town of Belvedere, just north of San Francisco in Marin County, for
$15,000 per month. However, he told people that he owned the house, which he
decorated with copies of famous art works by Picasso, Miro and Matisse – telling
guests that they were originals.
Cohen also took lavish vacations to
Europe and bought hundreds of thousands of dollars’ worth of jewelry, a Rolls
Royce, an Aston Martin and a Jaguar. In addition, he used some of the investors’
money to help his wife publish a cookbook titled The Kosher Billionaire’s Secret
. Despite all this, he reported very little income on his tax returns and
paid no taxes.
His defense attorneys had asked for a sentence of no more
than nine years.
“A 30-year sentence is excessive for a 53-year-old
first-time offender, who has a long history of selfless acts and entrepreneurial
innovation,” they asserted
in a court document.
They described his
character as upstanding, mentioning large sums he had donated to charity and
recounting how back in Israel, even “at a young age, Mr. Cohen took after-school
jobs in order to support his parents. In those jobs, Mr. Cohen was
‘always hard working, caring and very generous.’ Through these jobs, Mr. Cohen
was instilled with an appreciation for the value of hard work and a sense of
responsibility for helping others.”
Attorney Marcus Topel of Kasowitz,
Benson, Torres & Friedman LLP, told The Jerusalem Post
by phone that they
were planning to file an appeal later this week.
“We are going to ask for
a retrial,” he said. “It’s our view that the fundamental and exculpatory
evidence was not presented to the jury.”
In the meantime, the sentencing
decisions are not yet complete. Judge Charles R. Breyer has set a hearing
for May 3 to consider fines against Cohen, which could reach a total of $60m.Legal documents provided courtesy of www.justia.com