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I’ve been keeping pretty close tabs on Samuel “Mouli” Cohen since I received a call about him more than three years ago.

It’s a story that has everything — fraudulent art, private chefs, chauffeurs, celebrities, lies, intrigue, elaborate mansions and a once in a lifetime opportunity.

Beginning with his arrest in August 2010, trial and ultimate conviction, I wrote several blog posts about Cohen and received a number of phone calls from former victims, business partners and people who personally knew and met Cohen.

One of those calls was from Fosco Bianchetti who met Cohen several years ago. After his encounter with Cohen, which he described as the “weirdest dinner ever,” he too became fascinated in Cohen.

I met Bianchetti, an Italian entrepreneur, in New York last year.Among his many roles, he is the director of Twill magazine.

He asked me to write an article about Cohen, which was just published in the most recent version of Twill.

One day, this story should be a book.

But for now, you can read the condensed version in Twill magazine.

Image published with permission of Twill magazine.

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On April 30, 2012, Samuel “Mouli” Cohen was sentenced to 22 years in prison stemming from charges that he defrauded investors out of $35 million. Federal prosecutors sought a 30 year sentence.

In November 2011 Cohen was convicted of 15 counts of wire fraud, 11 counts of money laundering and three counts of tax evasion.

In addition to his 22 year sentence, the Court ordered a $31,422,403 judgment against Cohen.

As previously reported, a background investigation on Samuel “Mouli” Cohen would have identified multiple “red flags” that could have saved investors millions of dollars.

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Samuel “Mouli” Cohen’s sentencing, which was scheduled for February 1, 2012, has been pushed to April 30, 2012. As previously reported, after a three week trial, Cohen was found Cohen guilty on 29 of the 35 counts of wire fraud, money laundering and tax evasion in November 2011.

There were some interesting revelations in recent court filings. In response to Cohen’s motion for bail, the government indicated that Cohen sought to be released prior to his sentencing “under significantly less restrictive conditions than the Court imposed before he tried to bribe a security guard, before he was convicted of multiple counts of mail fraud, money laundering, and tax evasion, and before he learned he (sic) his preliminary Guidelines range of imprisonment is 360 months to life.”  Details of the reported “bribe” were not in the court filings.

Some of the other interesting revelations in the government’s motion:

  • Cohen was renting a 9,000 square foot Beverly Hills home for $50,000 per month at the time of his arrest and had a “personal staff, including a chauffeur, bodyguards, and a personal chef.”  Prior to his $50,000 per month Beverly Hills home, he was renting a $15,000 a month residence in Belvedere, California outside of San Francisco.
  • Not only did Cohen lie to investors about owning his “mansion” in Belvedere, California he lied to investors and even his wife about owning a private jet. Cohen reportedly “went to absurd lengths” to hide the fact that the plane was rented from his wife “having the private jet rental crew clean out all evidence of it being a rented jet and filling the cabin with ‘Cohen’ china and ‘M❤S’ decals before every flight.”
  • In addition to lying about the jet, the government contends that he he married Stacy Cohen in Europe in 2003, but he wasn’t divorced from his first wife until March 2005.
  • Not only did he steal from investors and lie to his wife, he “callously stole the life savings of his father-in-law.”  Stacy Cohen’s father, who had given Mouli Cohen millions of dollars, wrote in a holiday card to Stacy and Mouli Cohen, “All I want for Christmas is for Mouli to replace my IRA’s.”  Sadly, Stacy Cohen’s father later passed away.
  • Three days after Cohen’s conviction, the government alleged that Stacy Cohen filed for an “expedited renewal of a non-standard passport (with extra pages for more frequent international travel).”

In conclusion, the government wrote that Cohen’s “incentives to flee are enormous.”

Judge Charles Breyer denied Cohen’s motion for bail.  It’s safe to say that this will not be Cohen’s last attempt to be let out on bail before his April sentencing.  Stay tuned…

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After a three week trial, a jury found Samuel “Mouli” Cohen guilty on 29 of the 35 counts in the superseding indictment including 15 counts of wire fraud, 11 counts of money laundering and three counts of tax evasion.

As previously reported, in August 2010, federal prosecutors in California unsealed a criminal indictment charging Samuel “Mouli” Cohen of 19 counts of wire fraud and 13 counts of “engaging in Monetary Transactions in Criminally Derived Property.” The charges stem from allegations that Cohen defrauded over 55 investors, including actor Danny Glover, out of more than $30 million with claims that his company was about to be acquired by Microsoft Corp.

According to a press release from the U.S. Department of Justice,  Cohen falsely told prospective investors, that his company, Ecast, Inc., was about to be acquired by Microsoft and falsely told investors that first United States regulators, and later European Union regulators, were delaying the approval of the acquisition.  Over the course of approximately three years investors paid $25 million toward this purported acquisition based on Cohen’s false representations about the non-existent acquisition of Ecast.

There was “no actual or potential acquisition of Ecast by Microsoft.”  Cohen spent $6 million of investors money on private jet rentals, hundreds of thousands of dollars on jewelry, vacations and expensive cars and $15,000 a month to rent a lavish home in Belvedere, California all while reporting “almost no income on his tax returns” and “paid zero taxes.”

Cohen is scheduled to be sentenced on February 1, 2012.

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The Mouli Cohen trial is set to begin on Monday, October 17, 2011.  The trial is on Judge Breyer’s calendar through Thursday, November 17, 2011.

As previously reported, in August 2010, federal prosecutors in California unsealed a criminal indictment charging Samuel “Mouli” Cohen of 19 counts of wire fraud and 13 counts of  “engaging in Monetary Transactions in Criminally Derived Property.”  The charges stem from allegations that Cohen defrauded over 55 investors, including actor Danny Glover, out of more than $30 million with claims that his company was about to be acquired by Microsoft Corp.

While we will be keeping our eye on the case as it progresses, some interesting revelations were made in a few filings by Cohen’s attorney and by the government last week including allegations that Cohen’s art collection was a fake:

  • In a Joint Statement of the Case filed on October 12, 2011, the government alleges that Cohen “enticed individuals to purchase shares in a company called Ecast by falsely telling those individuals that the company was about to be acquired by Microsoft and that the acquisition would result in the shares of Ecast becoming highly valuable.”  Cohen alleged that all of the money invested from 2005 through 2007 referenced in the indictment were “loans to Signet, convertible into the defendant’s Procinea stock.” Cohen controlled both Signet and Procinea.
  • The government is set to bring evidence of Cohen’s luxurious lifestyle and that he used to “fraudulently obtained money to make personal expenditures on, for example, planes, automobiles, jewelry, credit card bills, and publishing a cookbook.”  Among the evidence brought about Cohen’s luxurious lifestyle, the government is expected to bring evidence that Cohen “spent millions of dollars of investor money renting private jets for personal travel to vacation destinations.”
  • One of the government’s exhibits is 500 pages (that is not a typo) of American Express statements for Stacy Cohen (Mouli Cohen’s wife) from January 2005 through December 2008.
  • Cohen allegedly claimed a $96,234 income loss on his tax return in 2004 and “no other income” despite the fact that he sold $6.2 million worth of shares of Ecast stock during the same period.
  • Cohen reportedly boasted to investors about his  impressive art collection “telling various victims that some of his art was on loan to museums or boasting of his collection of Matisse, Calder, and other famous artists.”  The government alleges that it was fake.  The government will bring evidence that Cohen hired someone to “reproduce several paintings” and that the artist was told “not to tell anyone that they were reproductions.”  Cohen allegedly paid the artist “a few thousand dollars to reproduce paintings purportedly worth hundreds of thousands or millions of dollars.”
We will be keeping our tabs on the trial over the coming weeks so keep checking back for further updates or sign up for the our email updates to the right.

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The trial for Samuel “Mouli” Cohen, which was scheduled to begin on September 19, 2011, is now set to begin on October 17, 2011.  Jury selection will begin on October 13, 2011. The trial will be held in San Francisco before Judge Charles R. Breyer.

As previously reported, in August 2010, federal prosecutors in California unsealed a criminal indictment charging Samuel “Mouli” Cohen of 19 counts of wire fraud and 13 counts of  “engaging in Monetary Transactions in Criminally Derived Property.”  The charges stem from allegations that Cohen defrauded over 55 investors, including actor Danny Glover, out of more than $30 million with claims that his company was about to be acquired by Microsoft Corp.

In August 2011, federal prosecutors added three counts of tax evasion for signing “false and fraudulent U.S. Individual Tax Return(s)” for the years 2005, 2006 and 2007 (see Mouli Cohen’s Superseding Indictment).

The government has filed a list of 34 witnesses that could be called to trial, many of which appear to be victims of Cohen’s scheme.  Prosecutors have also supplied a  list of more than 170 exhibits that could be brought into evidence at the the trial which include bank account records, tax records and emails.

According to information on the Federal Bureau of Prisons website, Cohen is currently being held at the Metropolitan Detention Center in Los Angeles, however, on August 26, 2011 Judge Breyer signed an order setting bail at $10 million and setting certain conditions upon release.  Update: Cohen met the conditions of his bail and was released on Tuesday, September, 20, 2011.

Cohen, who is required to have armed security guards throughout the period of his release, had to advance $80,000 to the security guard company to provide 24 hour security from the time of release through the end of October.

Cohen is required to wear a GPS device, is not allowed any communication except through a land-line phone and is bound to his wife’s residence at all times except to travel to the offices of his attorney or to Court.

As previously reported on this website, there were numerous “red flags” in Cohen’s background that should have been cause for concern for any investor prior to his arrest in August 2010.

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September 2011 Update: Samuel “Mouli” Cohen Trial Set

As previously discussed on this website, in August 2010 Federal prosecutors unsealed a criminal indictment against a California businessman Samuel “Mouli” Cohen of defrauding at least 55 investors out of more than $30 million in connection with a publicly-traded company called Ecast, which Cohen reportedly misrepresented that the Company was on the verge of being acquired by Microsoft Corp.

On October 6, 2010, Cohen’s Attorney filed a motion to release Cohen on bail.  The government has since filed a reply brief opposing the motion to release Cohen stating that he may be a “serious risk of flight.” Following an oral argument held on October 19, 2010, Judge Susan Ilston ultimately denied Cohen’s motion for bail release.

Upon reviewing the case filings, Federal prosecutors have outlined several additional allegations regarding Mr. Mouli’s “criminal enterprise”:

  • The government has contended that Cohen sold more than six million shares of Ecast to various investors when in fact, the most shares Cohen has ever allegedly possessed was five or six million.  Cohen also received more than $30 million in additional funds (in addition to the original investment) which was to be used for fees and costs associated with finalizing Microsoft’s alleged acquisition of Ecast.  The government contends that the both the Microsoft acquisition as well as the “additional funds” received to complete the acquisition were a complete fabrication.

    Kosher Billionaire's Secret Recipe

    Stacy Cohen authored "The Kosher Billionaire's Secret Recipe" in 2007.

  • The government has also alleged that “$20,000,000 of the money stolen by [Cohen]…passed through the defendant’s wife’s bank accounts and she financed the publication of her book…with money the defendant stole from the victims.“  They further argue that more than $3 million of the money has been sent to Swiss bank accounts, which the government contends reflects that Cohen may be hiding assets elsewhere.  In his response, Cohen’s attorney stated that Cohen became “concerned” about Wells Fargo during the financial crisis in 2008 and to “protect shareholders and his own family” he transferred approximately $2 million to a Credit Suisse account.
  • At the time of his arrest, Cohen had accumulated a mountain of debt including more than $450,000 for private jet rentals and credit card expenses.  He also reportedly “several million dollars” in debt with another individual for defrauding him in connection with investments unrelated to Ecast.  On top of all this, he also reportedly owes his former counsel, Skadden Arps, several millions in unpaid legal fees.  The government’s reply brief further disclosed:

“At the time of his arrest the defendant was living in a mansion in Beverly Hills with a rental payment of approximately $50,000 per month.  His wife drove a Jaguar and he was chauffeured around in a Bentley. He employed body guards, a cook, and several other staff at his mansion. Nevertheless, he expects this Court to believe that upon being arrested he instantly and inexplicably became penniless.”

  • Commenting on his wealth, Mouli has stated that he has “developed a business development fund” which at the time of his arrest was valued “by accountants at nearly $100 million (based on the prognosis for the companies being developed).”
  • Over the past several years, Cohen has offered himself to investors as a highly successful investor but apparently forgot to inform the IRS!  The government alleges that they are “unaware of the defendant earning any actual income by a a legitimate means over the last decade” and if any of his “ideas/companies have actually generated any income for him….[Cohen] has failed to pay tax on that income.”  In Cohen’s response, he claims that he regularly filed income tax returns and that in the view of his “prominent lawyers and tax experts,” tax was not due because of the “nature of the companies and the companies that generate these funds.”
  • Perhaps the most striking revelation offered by the government to date are Cohen’s telephone calls that the government recorded while he was in jail.  The government alleges that during these conversations, Cohen made statements suggesting he has “significant” assets available which upon his temporary release, “it will be all over” suggesting he is a serious risk of flight.
  • Sadly, there have been numerous reported correspondences between Cohen’s victims and the Justice Department dating back to 2006 requesting the government to take a closer look at Cohen.  Additionally, the SEC began looking into Cohen in at least July 2009 when they reportedly sent him a letter requesting a voluntary production of documents.  Ironically, on August 3, 2010 Cohen received an exoneration letter from the SEC just days before his arrest.  Could this have been the government’s ploy to get Cohen’s guard down before his arrest as court transcripts suggest they were seeking to apprehend him in early July 2010?  (We are giving the SEC the benefit of the doubt here!)SEC letter to Mouli Cohen

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September 2011 Update: Samuel “Mouli” Cohen Trial Set

Hiring a professional private investigator to conduct a comprehensive due diligence investigation on Samuel “Mouli” Cohen would have identified multiple “red flags” that could have saved investors millions of dollars.

On August 9, 2010, federal prosecutors in California unsealed a criminal indictment accusing local businessman Samuel “Mouli” Cohen of defrauding over 55 investors, including actor Danny Glover, out of more than $30 million with claims that his company was about to be acquired by Microsoft Corp. On his website, the Israel-born Cohen describes himself as an entrepreneur, “one of the few to have success in biotechnology and high technology,” and he claims to have “generated well over $3 billion in shareholder value.”

According to the indictment, Cohen allegedly lied to investors with claims that his company, Ecast, was about to be acquired by Microsoft and that once the deal was completed, Cohen’s Ecast shares would be exchanged on a 1-for-1 basis for Microsoft shares of stock, which would have netted investors significant gains. According to a related civil lawsuit that Glover and his affiliate Vanguard Public Foundation filed against Cohen last year, Vanguard “has been effectively destroyed” by Cohen’s activities. Cohen was a persuasive salesman who had “all the trappings of success,” according to Peter Rehon, a lawyer in the civil suit.

Does this sound familiar?

Now we cannot live in hindsight, but we can learn from our mistakes and shortcomings. By hiring a investigator with both the knowledge and experience to conduct a comprehensive due diligence investigation on Mr. Cohen, certain “red flags” would have immediately stood-out:

  • Prior Allegations of Fraud – A review of civil litigation filings where Mr. Cohen either resided or worked identified more than 20 lawsuits against him dating back to the 1990’s. They include two lawsuits from 2003 and 2004 which contained fraud allegations against Cohen that are nearly identical to the recently-filed criminal indictment. A more in-depth review of the those litigation filings would have uncovered allegations that Cohen was not the successful entrepreneur with a self-reported net worth of over $40 million and was Ecast not close to finalizing any merger deals or financing agreements with Microsoft.
  • Failed Business Venture – Over the past several years, Cohen has issued numerous press releases and online posts relating to his many ventures claiming that he was “one of few to have success in biotechnology and high technology” which has “generated well over $3 billion in shareholder value.” However, Cohen failed to disclose that just prior to his affiliation with Ecast he was president and CEO of Playnet Technologies which filed for Chapter 11 bankruptcy in June 1998. According to a 1997 SEC filing, Playnet Technologies had $819,894 in revenues for the period of 1990 through July 1997 and a net loss of $170,561 for that same period.
  • Conspicuous Consumption – In August 2002, the San Francisco Chronicle reported that Mouli Cohen had 30 guests at his multi-million dollar Belvedere residence “to celebrate the completion of his new house.” However, subsequent investigation disclosed that Cohen never actually owned this property. The residence had been owned by a Lawrence and Karen Drebes, founders of desktop.com, since the late 1990’s. In addition, Cohen often self-promoted himself via videos on YouTube discussing fine art and philanthropy painting the “trappings of success.” Cohen also posted various photographs of himself on one of his many social networking websites taking pleasure on yachts, ski vacations, and beautiful beaches all while giving projecting an image of vast wealth to potential investors who may decide to “Google him.”
  • $450,000 Owed in Federal Tax Liens – On October 22, 1998 a $150,627 federal tax lien was filed against Cohen in New York and on February 27, 2001 a $313,592 federal tax lien was filed against Cohen in San Francisco. Additionally, the New York State Tax Commission filed a $40,492 judgment against Cohen on December 2, 1999.
  • “Millionaire Residency” Status – Multiple press releases published by Cohen disclosed that he “was awarded the first-ever ‘Millionaire Residency’ with full citizenship status by President George H. Bush.” Unfortunately for Mr. Cohen, as far as we can tell, there is no such thing as a “Millionaire Residency” status. A simple Google search of the term “Millionaire Residency” does identify multiple results, but upon further review, nearly all of them relate to Cohen and his self-promoting.
  • Inconsistencies in Cohen’s Professional History – There are multiple inconsistencies with Cohen’s self-reported employment history on his LinkedIn profile as compared to his reported work history to the SEC. Specifically, his online profile page indicates that he was Chairman and CEO of “Aristo International” from 1980 and 1982, while SEC filings indicate he was affiliated with Aristo International (which later became Playnet Technologies) from 1990 through 1998. In addition, he self-reports that he was Chairman and CEO of “Lamia Enterprises” from 1982 and 1984, while according to SEC Filings he was affiliated with Lamia from 1989 through 1991. While date inconsistencies with a person’s reported employment history may not necessarily be a clear indication of fraud, numerous and significant inconsistencies do raise a red flag and should be grounds for further inquiry.
  • Multiple Aliases – A review of litigation filings and other publicly-available documentation identified multiple aliases for Mr. Cohen over the past 10 years including: Mouli Cohen, Shmuel Cohen, Shmual Cohen, Schmual Cohen, Samuel Cohen and Moli Cohen. Although the multiple name variations are not significant in and of themselves, it raises the possibility of accusations against other aliases, which he could have been looking to hide.

Note that the information reported above was identified exclusively through the examination of publicly-available documentation.  Additional facts may have also been disclosed via interviews with Mr. Cohen’s former business partners, known associates, legal counterparts or possibly even his ex-wife.

What Does This All Mean?

Fraudsters are now adapting to a new culture whereby potential investors are becoming more aware and skeptical of large promises and guaranteed returns. Unfortunately, some of these skeptics are putting on their own fedora hats and trying to conduct their own investigation through Google or one of the many “fly by night” background checking websites to conduct their own due diligence investigation. As demonstrated by the case of Mouli Cohen, millions of dollars in losses could have been prevented had investors consulted a due diligence investigator to help them avoid a “persuasive salesman who had ‘all the trappings of success.’”

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