January 30 2012
LOS ANGELES – A Sherman Oaks man who along with his son ran a scheme that defrauded more than 1,000 victims out of over $39 million with promises of large returns in companies, including one that supposedly sold caffeinated breath mints, was sentenced today to 153 months in federal prison.
Richard Alan Cohen, 63, was sentenced this morning by United States District Judge George H. Wu.
Last Monday, Richard Cohen’s son – Daniel Cohen, 36, of Calabasas – was sentenced to 151 months in prison for his role in the fraudulent telemarketing scam.
In addition to the prison terms, Judge Wu ordered the Cohens to pay $39,590,212 in restitution to victims of the fraud.
In the mid-2000s, the Cohens formed several companies – including Eurobrand, LLC, doing business as Euromints; Samuel & Cohen Media, LLC, doing business as Unleashed Magazine; Mintech International, Inc.; and Rig Leasing, Inc. – that they used to solicit investors with false claims that the businesses were successful and generated large profits. Potential investors were solicited in several ways, including by a team of salespeople who worked in a Calabasas “boiler room.” In addition to making claims that the businesses were viable and successful, salespeople often told potential investors that the companies were on the verge of “going public” or were going to be taken over by larger companies. Salespeople commonly told potential investors that they could buy company stock from a widowed investor who was willing to sell her investment at a discounted price.
In reality, the Cohen companies were not successful, the stock certificates issued by the companies were worthless, and a substantial portion of the money received from victim-investors was skimmed by the Cohens to fund their lavish lifestyles, which included luxury automobiles and Daniel Cohen’s “palatial” home in Calabasas.
As part of the scheme, the Cohens were involved in related fraudulent activity, which included Richard Cohen’s efforts to avoid paying restitution to victims who lost money when his commodities investment company, Madison Financial, was shut down by the Commodities Futures Trading Commission. Richard Cohen used a variety of means to withhold information regarding his income and assets from the CFTC, including having his son pay rent on his $8,500-a-month Bel Air residence and using an American Express Black card in his son’s name to conceal hundreds of thousands of dollars in income that had been misappropriated from investors.
Both Richard and Daniel Cohen pleaded guilty to conspiracy, 11 counts of mail fraud, two counts of causing victims to travel in relation to a fraud, and conspiracy to evade tax laws. Richard Cohen additionally pleaded guilty to two counts of money laundering, three counts of making false statements to the CFTC, two counts of filing false tax returns and three counts of tax evasion. Additionally, Daniel Cohen pleaded guilty to five counts of money laundering.
The investigation into the Cohens and their companies was conducted by IRS – Criminal Investigation, the United States Postal Inspection Service and the Federal Bureau of Investigation.
CONTACT: Assistant United States Attorney Stephen A. Cazares
Major Frauds Section
Release No. 12-019