Financial Advisor Convicted Of Scheme To Defraud Professional Basketball Players
Wednesday, March 4, 2026 - United States Attorney for the Southern District of New York, Jay Clayton, announced the conviction of DARRYL COHEN for defrauding three professional basketball players who were among his former financial advisory clients, following a five-week jury trial before U.S. District Judge Vernon S. Broderick.
“Financial Advisor Darryl 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,” said U.S. Attorney Jay Clayton. “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.”
According to the charging documents, statements made in public filings, and public court proceedings, including evidence presented at trial:
From at least in or about 2017 through in or about 2020, COHEN, a registered investment adviser, orchestrated a scheme to defraud three different professional basketball player clients—Chandler Parsons, Courtney Lee, and Jrue Holiday—of a total of over $5 million by taking advantage of his advisory and fiduciary relationships with them.
First, COHEN and accountant BRIAN GILDER fraudulently induced Parsons, Lee, and Holiday to purchase viatical life insurance policies at massive markups. COHEN did not disclose that GILDER had arranged for a law firm (“Law Firm-1”) that he controlled to purchase the policies and then to sell them to the athletes at markups of 222%, 310%, and 244%, respectively. Indeed, Law Firm-1 made approximately $4.5 million in profit from the sale of the policies to COHEN’s athlete clients. COHEN and GILDER used a substantial portion of these illicit proceeds to pay their own personal expenses. In particular, COHEN: (i) used approximately $178,462 of the funds to renovate his home and to perform work on his pool; (iii) used approximately $67,500 of the funds to pay off his personal credit card bill; and (iv) transferred approximately $200,000 of the funds to an individual with whom he was in a romantic relationship.
Second, COHEN directed that $500,000 be transferred from the accounts of Parsons and Lee as purported donations to a non-profit organization, Beast Basketball. COHEN then used approximately $238,000 of the funds purportedly donated to the non-profit to build a state-of-the-art athletic gym in the backyard of his home. Parsons and Lee never, in fact, authorized any transfers of their funds to Beast Basketball. When Parsons confronted COHEN about the donations, COHEN told Parsons in a text message, in substance and in part, that Parsons’s money had “[h]elped a lot of future prospects and a lot of underprivileged kids.” COHEN did not disclose to Parsons that a substantial portion of Parsons’s donations had, in fact, been used to build a state-of-the-art athletic gym in COHEN’s backyard.
Third, COHEN used a sports agency and another law firm to channel approximately $328,125 of Parsons’s money to repay a former professional baseball player, Nyjer Morgan, who was a disgruntled client of COHEN’s. Morgan had expressed concern to COHEN about investments and loans that COHEN made on Morgan’s behalf and demanded to be repaid. On or about February 19, 2020, in the midst of making the payments of Parsons’s money to Morgan, COHEN messaged GILDER, “We gotta send [Morgan] more to get rid of him.” Parsons did not authorize COHEN to use of funds from his account to pay off Morgan.
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COHEN, 52, of Chatsworth, California, was convicted of one count of wire fraud, which carries a maximum sentence of 20 years in prison, as well as one count of investment adviser fraud, which carries a maximum sentence of five years in prison.
The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. COHEN is scheduled to be sentenced by Judge Broderick at a date to be determined.
Mr. Clayton praised the outstanding work of the Federal Bureau of Investigation. Mr. Clayton also thanked the United States Attorney’s Offices for the Central District of California, the Northern District of Georgia, and the Southern District of Texas for their assistance in the investigation. Mr. Clayton further thanked the U.S. Securities and Exchange Commission, which filed a parallel civil action against COHEN, for its assistance and cooperation in this investigation.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorneys Kevin Mead, Brandon Thompson, and William Kinder are in charge of the prosecution.
Contact
Nicholas Biase, Shelby Wratchford
(212) 637-2600
Source: U.S. Attorney's Office, Southern District of New York
