Landmark Tax Group

Former CEO Sentenced for $30M Fraud Scheme

On April 30, 2012, in San Francisco, California, Mouli Cohen, aka Samuel Cohen, was sentenced to 264 months in prison, three years of supervised release and ordered to pay a money judgment of $31,422,403, a $25,000 fine, and a $2,900 special assessment.  Cohen was convicted by a trial jury in November 2011 of 15 counts of wire fraud, 11 counts of money laundering and three counts of tax evasion.  Evidence at trial showed that Cohen falsely told prospective investors – most of whom were affiliated with the Vanguard Public Foundation, the former San Francisco non-profit organization – that Cohen’s company, Ecast, Inc., was about to be acquired by Microsoft.  Based on those false representations, victims purchased more than $6 million of Cohen’s founders’ shares in Ecast.  Cohen falsely represented that this investment would provide an opportunity for the investors to contribute a substantial amount of the profits to the Vanguard Public Foundation. Then Cohen falsely told investors that there were delays in the approval of the acquisition and that investors needed to pay their share of the fees and to post bonds held in escrow to assure the acquisition was completed or the investors would lose their prior investment.  In addition to their initial $6.2 million investment, over the course of approximately three years, scores of investors paid $25 million toward this purported acquisition based on Cohen’s false representations about the non-existent acquisition of Ecast. Evidence showed that while pulling in millions of dollars from this fraudulent scheme, Cohen spent money on luxury expenses, for example, more than $6 million on private jet rentals; hundreds of thousands of dollars worth of jewelry; high-end vehicles and numerous luxury vacations.  Finally, despite collecting tens of millions of dollars from victims and spending huge amounts to live a lavish lifestyle, Cohen reported almost no income on his tax returns and paid zero taxes.  Over the course of several years, Cohen scammed more than 50 victims out of approximately $31 million.

Source: IRS.gov

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