Co-Founder and Former CEO of Technology Company Sentenced to 22 Years in Prison for $30 Million Fraud Scheme

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MouliCohen Defrauded Scores of Victims, Including Vanguard Public FoundationSupporters
SAN FRANCISCO—Mouli Cohen (aka SamuelCohen) was sentenced today to 22 years in prison for operating an investmentscheme over the course of several years in which he scammed more than 50victims out of approximately $31 million, United States Attorney Melinda Haagannounced.
On November 9, 2011, after a trial ofapproximately one month, a jury convicted Cohen of 15 counts of wire fraud, 11counts of money laundering, and three counts of tax evasion. The jury acquittedCohen of four counts of wire fraud and two counts of money laundering. Afterthe jury’s verdict, United States District Court Judge Charles R. Breyerremanded Cohen into custody.
Evidence at trial showed that Cohen, 54,formerly of Belvedere, California and Lower Bel Air, California, falsely toldprospective investors—most of whom were affiliated with the Vanguard PublicFoundation, the former San Francisco non-profit organization—that Cohen’scompany, Ecast, Inc., was about to be acquired by Microsoft. Based on thosefalse representations, victims purchased more than $6 million of Cohen’sfounders’ shares in Ecast. Cohen falsely represented that this investment wouldprovide an opportunity for the investors to contribute a substantial amount ofthe profits to the Vanguard Public Foundation non-profit organization.
Over time, however, Cohen falsely toldinvestors that United States regulators, and later European Union regulators,were delaying the approval of the acquisition. Cohen falsely claimed that theinvestors needed to pay their share of the fees and to post bonds held inescrow to assure the acquisition was completed, or the investors would losetheir prior investment. Cohen falsely told the investors that other, largerinvestors—such as various Silicon Valley venture capital firms—also were payingtheir pro rata share of these bonds and fees. In addition to their initial $6.2million investment, over the course of approximately three years scores ofinvestors paid $25 million toward this purported acquisition based on Cohen’sfalse representations about the non-existent acquisition of Ecast.
In fact, as Cohen knew, there never wasany actual or potential acquisition of Ecast by Microsoft. Instead, evidenceshowed that while pulling in millions of dollars from this fraudulent scheme,Cohen spent money on, for example, more than $6 million on private jet rentals;hundreds of thousands of dollars worth of jewelry; a Rolls Royce; an AstonMartin; a Jaguar; numerous luxury vacations to destinations such as Italy, thesouth of France, and the Caribbean; and $15,000 per month to rent a home inBelvedere, California. Finally, despite collecting tens of millions of dollarsfrom victims and spending huge amounts to live a lavish lifestyle, Cohenreported almost no income on his tax returns and paid zero taxes.
Cohen was indicted by a federal grandjury on July 15, 2010, and charged with 19 counts of wire fraud and 13 countsof money laundering. That indictment was unsealed when Mr. Cohen was arrestedin southern California on August 5, 2010. On August 2, 2011, a federal grandjury returned a superseding indictment against Cohen, adding three counts oftax evasion.
The sentence was handed down by U.S.District Court Judge Charles R. Breyer. Judge Breyer also ordered a moneyjudgment against Cohen in the amount of $31,422,403.06 and sentenced thedefendant to three years of supervised release, a fine of $25,000, and aspecial assessment of $2,900. Cohen remains in custody.
Hallie Mitchell and Doug Sprague are theAssistant U.S. Attorneys who prosecuted the case with the assistance of BethMargen and Rayneisha Booth. The prosecution is the result of a one-yearinvestigation by the Internal Revenue Service Criminal Investigation and theFederal Bureau of Investigation.
This law enforcement action is part ofPresident Barack Obama’s Financial Fraud Enforcement Task Force. PresidentObama established the interagency Financial Fraud Enforcement Task Force towage an aggressive, coordinated, and proactive effort to investigate andprosecute financial crimes. The task force includes representatives from abroad range of federal agencies, regulatory authorities, inspectors general,and state and local law enforcement who, working together, bring to bear apowerful array of criminal and civil enforcement resources. The task force isworking to improve efforts across the federal executive branch, and with stateand local partners, to investigate and prosecute significant financial crimes,ensure just and effective punishment for those who perpetrate financial crimes,combat discrimination in the lending and financial markets, and recoverproceeds for victims of financial crimes.