On January 30, 2012, in Los Angeles, California, Richard Alan Cohen was sentenced to 153 months in prison for his role in running a scheme that defrauded more than 1,000 victims out of over $39 million with promises of large returns in companies, including one that supposedly sold caffeinated breath mints. On January 23, 2012, Daniel Cohen, Richard’s son, was sentenced to 151 months in prison for his role in the fraudulent scheme. In addition, the Cohens were ordered to pay $39,590,212 in restitution to victims of the fraud. According to court documents, in the mid-2000s, the Cohens formed several companies that they used to solicit investors with false claims that the businesses were successful and generated large profits. Potential investors were solicited in several ways, including by a team of salespeople who worked in a “boiler room.” In addition to making claims that the businesses were viable and successful, salespeople often told potential investors that the companies were on the verge of “going public” or were going to be taken over by larger companies. Salespeople commonly told potential investors that they could buy company stock from a widowed investor who was willing to sell her investment at a discounted price. In reality, the Cohen companies were not successful, the stock certificates issued by the companies were worthless, and a substantial portion of the money received from victim-investors was skimmed by the Cohens to fund their lavish lifestyles, which included luxury automobiles and Daniel Cohen’s “palatial” home.
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