Advisor convicted of defrauding NBA players through viatical life sales
A California investment advisor was convicted of defrauding three former NBA players out of more than $5 million, federal prosecutors said.
U.S. Attorney Jay Clayton said a jury found Darryl Cohen guilty following a five-week trial before U.S. District Judge Vernon S. Broderick.
Prosecutors said Cohen, 52, of Chatsworth, orchestrated a scheme between 2017 and 2020 to exploit his advisory relationships with former professional basketball players Chandler Parsons, Courtney Lee and Jrue Holiday.
“Cohen built trust with successful pro athletes — then betrayed it, stealing their money to fund personal luxuries, including a state-of-the-art gym in his own backyard,” Clayton said. “New Yorkers deserve honest financial advice — not advisors who scheme to steal clients’ funds, rather than protect their financial interests — and this office is committed to removing bad actors from our markets.”
The prosecution was part of a wide-ranging crackdown on fraud against professional athletes led by the Southern District of New York. A Georgia businessman was convicted in October 2024.
Resale profits up to 310%
According to evidence presented at trial, Cohen and accountant Brian Gilder steered the NBA athletes into purchasing viatical life insurance policies at steep markups without disclosing that a law firm controlled by Gilder had first acquired the policies and then resold them at markups ranging from 222% to 310%. The firm generated about $4.5 million in profits from the transactions, prosecutors said.
Authorities said Cohen used portions of the proceeds for personal expenses, including home renovations, pool work, credit card payments and transfers to a romantic partner.
In a separate scheme, Cohen directed $500,000 from the accounts of Parsons and Lee to what he described as charitable donations to a nonprofit called Beast Basketball. Prosecutors said the players did not authorize the transfers and that roughly $238,000 of the money was used to build a gym at Cohen’s home. When questioned, Cohen told one player the funds had helped “future prospects” and “underprivileged kids,” according to court evidence.
Prosecutors also said Cohen diverted $328,125 from Parsons’ account to repay a former client, ex–Major League Baseball player Nyjer Morgan, who had demanded repayment over prior investments and loans. Parsons did not authorize the payment, authorities said.
A jury convicted Cohen of one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years. Sentencing is scheduled for a later date.
Clayton credited the FBI for its work on the case and thanked several U.S. attorneys’ offices and the U.S. Securities and Exchange Commission, which filed a parallel civil action, for their assistance.
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