We’ll call it a Family Affair – Richard Alan Cohen pleads guilty to Ponzi scheme fraud!

Bernie Madoff – West Coast Style!  What’s different – this father and son team are both facing serious time in prison.  Bernie got 150 years.  Seems the Cohen’s are looking at over 300 years.  Choices and consequences – but why the proliferation of Ponzi schemes?

Richard Alan Cohen, 61, a Sherman Oaks man pleaded guilty today to 26 felony counts related to a long-running scam that offered investments in, among other things, caffeinated mints and took approximately $39 million from 1,000 victims across the United States.

Richard Cohen’s son, Daniel Cohen, 34, of Calabasas, pleaded guilty on April 22 to 20 felony counts related to the scheme that utilized a number of sham companies, including one called Euromints.

Both Cohens face hundreds of years in federal prison when they are sentenced in the fall.

In the mid-1990s, the Cohens formed several companies – including Eurobrand, LLC, doing business as Euromints; Samuel & Cohen Media, LLC; Mintech International, Inc.; and Rig Leasing, Inc. – that they used to solicit investors with 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 Calabasas. 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 in Calabasas.

As part of the scheme, the Cohens were involved in related fraudulent activity, which included Richard Cohen’s efforts to avoid paying restitution to victims who lost money when his commodities investment company, Madison Financial, was shut down by the Commodities Futures Trading Commission. Richard Cohen withheld information from the CFTC through a number of ways, including having his son pay rent on his $8,500-a-month Bel Air residence and using an American Express Black card in his son’s name to conceal hundreds of thousands of dollars in income that had been misappropriated from investors.

Both Richard and Daniel Cohen pleaded guilty to conspiracy, 11 counts of mail fraud, two counts of causing victims to travel in relation to a fraud, and conspiracy to evade tax laws. Richard Cohen additionally pleaded guilty to two counts of money laundering, three counts of making false statements to the CFTC, two counts of filing false tax returns and three counts of tax evasion. Additionally, Daniel Cohen pleaded guilty to five counts of money laundering.

Richard Cohen is scheduled to be sentenced by Judge Wu on October 7, at which time he faces a statutory maximum sentence of 306 years in federal prison. Richard Cohen today agreed to surrender to begin serving his sentence on May 28.

Daniel Cohen is scheduled to be sentenced on September 23, at which time he faces a statutory maximum sentence of 290 years in prison. Daniel Cohen has been in custody since July 2009.

A third defendant involved in the Cohens’ scheme – Joshua Hoffman, 40, of Malibu – was sentenced in March to 5½ years in prison after pleading guilty in this case, as well as pleading guilty in another fraud case that defrauded various companies and organizations that thought they were purchasing advertising in magazines (see: http://www.justice.gov/usao/cac/pressroom/pr2010/049.html).

If you were a victim of these men…I’d like to know through your comments – how did you get connected with this long running expansive fraud.

YOUR COMMENTS ARE WELCOME!

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11 Responses to We’ll call it a Family Affair – Richard Alan Cohen pleads guilty to Ponzi scheme fraud!

  1. Debra Dobson says:

    MY HUSBAND, LES DOBSON AND MYSELF LOST THOUSANDS OF DOLLARS TO THE COHENS, AS WELL AS A MAN NAMED BRETT, HOW CAN WE RECOUP ANY OF OUR MONEY BACK ??????

  2. Jay says:

    I worked for Daniel under his Eurobrand-Euromints company in its infancy stages as a PR person. He and his Dad owned and operated a credit card/merchant solutions/processessing company next door. That later became a magazine company. Anyway, I responded to a job ad from the Daily News and I was introduced to this company by the Sales Manager Jim Fernholtz via telephone. I got invited for an interview to their Calabasas location. The office was narrow rectangular in shape and had a phone bank a long the wall as I came in. Before Jim got to explaining who the company was or the job and what it had entailed, he had given me a sample of a spearmint & cinnamon caffinated sugarfree Euromint, along with its tin packaging and he asked for my opinion. I said “See it, smell it, taste it”. That was my reaction along with “Hey thats actually good”. I was then given a PR script to paruze and he asked if I could front this deal and he would close them. I said sure and proceeded over time thereafter to generate numerous qualified investor prospects through cold calling / telemarketing off of their “Experian High Fico Credit Leads” lists that we used to compile information gathered from talking and qualifying the investors interest, controllability and liquidity along with their investment experience. Once the investor had received our PPM and samples of the Euromints in their tin packaging, an Executive VP / Sales Manager would call the investor, one to two days later and close the investor on buying shares in this company. IRA’s/401k’s custodial transfer and checks/bank wires was what investors used in order to buy this with. I had no idea that this company was dishonorable. The product was up on Longs Drugs retail shelves and a couple of other places at the time. Cases upon cases of this product was delivered and stacked up in our office and then shipped out. I believed in this company. I interacted regularly with upper management. I did see Bentley’s, Lamborgini’s and a Ducati as well as BMW, how lavish the lifestyle that all of upper management and the owners were living but I chalked it up to working around very successful people. I left the company just after Mr Fernholtz was fired, for embezzling commishion payouts, that he wasnt entitled to, on numerous occasions, that the records finally caught up to him. Shortly thereafter, a personal friend of Dans took over the Sales Manager position. I had a difference of opinion to his style. I dont remember his name. Pat does come to mind. It’ll come back to me later. That’s what I thought would be interesting to contribute here. There’s probably more. I’m sorry to all of the unsuspecting victims who lost their money to this. I’m very cautious on who I do business with today. Jay

  3. Marc Delcore says:

    I used to work in the same office building in Calabasas as the Cohen’s. My partners and I had no idea what was going on. They seemed normal to me and you would never have been able to guess what was they were up to based on their appearance and demeanor.

    Does anyone know what they think their sentence will be based on other cases? I’ve read a lot of Chuck’s previous blogs on other ponzi scheme masterminds and it seems that the Cohen’s really racked up a lot of miscellaneous charges compared to others.

    “Both Richard and Daniel Cohen pleaded guilty to conspiracy, 11 counts of mail fraud, two counts of causing victims to travel in relation to a fraud, and conspiracy to evade tax laws. Richard Cohen additionally pleaded guilty to two counts of money laundering, three counts of making false statements to the CFTC, two counts of filing false tax returns and three counts of tax evasion.”

    Is it just me, or did the Cohen’s rack up an unusual amount a lot of charges?

  4. D says:

    I worked for Danny and Rick at Madison Financial, a small commodities firm in Santa Monica. I never took them for criminals but after reading this article, it all makes sense. I was working for Madison for over 4 years and it was my impression that a former employee of Madison was fired and called the FTC to report them and that caused the demise of Madison. I was unaware that there were schemes involved but most all of the brokers in the company made over 10K a month or more so hmmmmmm maybe so. I feel bad for the people that were schemed but they also need to be responsible and looking where they are giving their money and make sure the company is a reputable one. I guess that is why it is called an investment.

  5. dave says:

    got me too. Was this a real product? If so who
    has it under what name.

  6. PS says:

    Does anyone know what they inevitably were sentenced?

  7. Curt says:

    I blog quite often and I seriously thank you for your
    information. This article has truly peaked my interest.
    I am going to take a note of your site and keep checking for new information about once per week.

    I subscribed to your RSS feed as well.

    Curt

  8. Natalie lace says:

    I have known Danny for years nice guy you would never had thought he would of done something like that …..

  9. Michael Gaddis says:

    I was a victim of a long-lasting phone scam and “invested” in a real estate partnership and received a certificate which was deposited in an IRA account in my name and now I face distribution from a worthless account. The name of the person I talked to was “Al Cohen.” I wonder, is this the same person? The “investments” I made was to be in under-valued residential real estate purchases, and in learning software for schools. Maybe there is another dubious Cohen out there? Or one and the same?

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