Tech exec gets 22 years in prison for $30M fraud

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by Associated Press

Associated Press

Posted on April 30, 2012 at 6:02 PM

Updated Tuesday, May 1 at 10:03 AM

SAN FRANCISCO (AP) — A former high-tech executive convicted of defrauding investors of at least $30 million was sentenced Monday to 22 years in prison after a judge denounced him for fleecing nearly 100 victims to finance an "obscene lifestyle" of private jets, gaudy jewelry and Swiss bank accounts.

U.S. District Judge Charles Breyer said Samuel "Mouli" Cohen was "nearly sociopathic" for refusing to show remorse for actor Danny Glover and others who suffered after he told them a company Cohen launched called Ecast that made electronic jukeboxes for bars was about to be acquired by Microsoft Corp.

The fraud caused the collapse of the nonprofit charity Vanguard Public Foundation, which Glover and singer Harry Belafonte founded in 1972, prosecutors said.

"In more than 40 years of experience with the criminal justice system, I have never encountered a con man like Mr. Cohen," Breyer told the defendant, who stood impassively in tan, jailhouse garb as emotional victims watched from the courtroom gallery. "He is serial in his proclivity to commit cons. He is nearly sociopathic in his ability to relate to his victims."

Breyer scheduled a Thursday hearing to determine the amount of fines and restitution to order against Cohen. Federal prosecutors are seeking restitution of $29.7 million. forfeiture of $31.4 million and a $250,000 fine.

Prosecutors had sought a 30-year prison term, which would have exceeded the sentence of Jeff Skilling, the architect of Enron Corp.'s collapse. Skilling is currently serving a 24-year, four-month sentence.

Cohen's attorney Marcus Topel sought a seven-year sentence, arguing that Cohen and his family were victims as well. Topel argued that the judge should take into account that Cohen donated $2 million to charitable organizations.

"It's others people money," Breyer replied. "The fact of the matter is that you gave their money to others and pretended it was yours."

Breyer agreed with prosecutors that Cohen deserved a harsh sentence because he viewed Cohen, 53, as a danger to the public who would launch another scam if freed from prison.

Nonetheless, Breyer said he was bound by sentencing guidelines to trim eight years of prison from the prosecutors' request.

Breyer disdainfully held up a cookbook written by Cohen's wife titled "The Kosher Billionaire's Secret Recipe" and called it a guidebook to the couple's "obscene lifestyle."

Cohen rented a $50,000-a-month mansion in the wealthy enclave of Belvedere just north of San Francisco, and decorated the house with copies of famous paintings by Picasso, Miro, Matisse and other noted artists.

Prosecutors said he solicited investments during parties at his house, which he told victims he owned while showing them the artwork he claimed were originals. Prosecutors said that was all part of a ruse to portray himself as a wealthy and savvy businessman.

Prosecutors produced receipts, credit card records and other evidence at the trial that showed Cohen spent $6 million on private jets, $1.4 million on a diamond ring, $372,000 on a Rolls Royce and $260,000 on an Aston Martin.

A federal jury in November convicted Cohen of 15 counts of wire fraud, 11 counts of money laundering and three counts of tax evasion after a three-week trial. Cohen plans to appeal.

Prosecutors said the swindle began in the fall of 2002 when Cohen approached Glover and Hari Dillon, who were leaders of the nonprofit Vanguard Public Foundation. The charity was launched in 1972 and distributed grants to a wide-range of social causes often on the far left on the political spectrum such as anti-war movements.

Cohen told Vanguard leaders that Microsoft was poised to buy Ecast and offered to sell shares to Glover, Vanguard and others affiliated with the charity for $3.50 each, promising extraordinary returns once the acquisition closed, prosecutors said.

Over the years, Cohen claimed the acquisition was being held up by U.S. regulators and then their counterparts in Europe. He returned several times to the investors and recruited new ones with pleas for more money to clear the alleged regulatory hurdles. Cohen said the deal would die without the additional funds, prosecutors said.

Vanguard and many of its key donors and others invested at least $30 million with Cohen, prosecutors said. Vanguard was forced to close its doors after the scheme was exposed in 2008.

Susanne Moore, a Vanguard board member, told the judge that Cohen took most of her net worth and caused the bitter falling out with two close friends while almost breaking up her marriage. Prosecutors allege in a court filing that Moore and her husband lost a little more than $1 million.

Cohen looked away when Moore tried to make eye contact with him.

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