Former advisor, financial planner charged with defrauding NBA players

A former Morgan Stanley advisor and a financial planner are among several people facing federal charges in connection with four professional athletes, three of them NBA players, allegedly being defrauded of $13 million.

The charges, announced Thursday, are in addition to Securities and Exchange Commission charges against the advisor, Darryl Matthew Cohen, who was fired by Morgan Stanley two years ago, according to court filings.

The alleged fraud came to light early last year, when several of the pro athletes filed a complaint against Morgan Stanley and Cohen with the Financial Industry Regulatory Authority Inc. The SEC and federal complaints don't list the athletes’ names, but previous reporting identified the victims as Milwaukee Bucks player Jrue Holiday, his wife Lauren Holiday, who is a former professional soccer player, former Dallas Mavericks player Courtney Lee and former Atlanta Hawks player Chandler Parsons.

From 2017 through 2020, Cohen and an independent financial planner, Brian Gilder, participated in an alleged “scheme to defraud three different professional basketball player clients of a total of over $5 million,” of the wider $13 million in fraud identified across the four defendants in the federal complaint. That scheme included having the three players buy viatical life insurance purchased through a law firm operated by Gilder at extreme markups ranging from 222% to 310%. The proceeds Cohen and Gilder received from those sales were used for mortgage payments, home renovations, credit card payments and a personal gift, according to the federal complaint.

Cohen also allegedly had $500,000 transferred from two of the client’s accounts to a nonprofit — money that reportedly was used to build athletic training facilities in his backyard and support his son’s amateur basketball program. Both Cohen and Gilder also pulled more than $300,000 from one client’s account to pay back another person who complained about loans taken out on that client’s behalf, the complaint read.

The federal indictment also named former NBA agent Charles Briscoe and another man, Calvin Darden, Jr., who had pled guilty to prior federal wire-fraud charges, according to the court filing.

An announcement of the federal charges noted that each of the defendants either had been arrested or would be arrested Thursday. The complaint did not list attorneys for the defendants.

A lawyer who had represented Cohen as of last year did not immediately respond to a request for comment, and a message sent to Gilder’s firm was not quickly returned.

A spokesperson for Morgan Stanley said in an email statement that the firm “fully cooperated with the investigation and have resolved clients’ claims related to Mr. Cohen. Mr. Cohen was terminated from the firm in March 2021 and has since been barred from the securities industry by Finra.”

In the federal criminal case, Cohen, Gilder, Briscoe and Darden each face one count of conspiracy to commit wire fraud and one count of wire fraud, each of has a maximum sentence of 20 years, according to the prosecutors. Darryl Cohen also faces a charge of investment advisor fraud, and Briscoe is also charged with aggravated identity theft.

The SEC complaint against Cohen includes two fraud charges related to misappropriation of more than $1 million from three current and former NBA players. That complaint seeks injunctive relief, disgorgement, and prejudgment interest and a monetary penalty.