Advisor convicted of defrauding NBA players through viatical life sales

A California investment advisor was convicted of defrauding three former NBA players out of more than $5 million, federal prosecutors said.

U.S. Attorney Jay Clayton said a jury found Darryl Cohen guilty following a five-week trial before U.S. District Judge Vernon S. Broderick.

Prosecutors said Cohen, 52, of Chatsworth, orchestrated a scheme between 2017 and 2020 to exploit his advisory relationships with former professional basketball players Chandler Parsons and Courtney Lee, and current Portland Trailblazers' star Jrue Holiday.

"Cohen built trust with successful pro athletes — then betrayed it, stealing their money to fund personal luxuries, including a state-of-the-art gym in his own backyard,” Clayton said. “New Yorkers deserve honest financial advice -- not advisors who scheme to steal clients’ funds, rather than protect their financial interests -- and this office is committed to removing bad actors from our markets.”

The prosecution was part of a wide-ranging crackdown on fraud against professional athletes led by the Southern District of New York. A Georgia businessman was convicted in October 2024.

Resale profits up to 310%

According to evidence presented at trial, Cohen and accountant Brian Gilder steered the NBA athletes into purchasing viatical life insurance policies at steep markups without disclosing that a law firm controlled by Gilder had first acquired the policies and then resold them at markups ranging from 222% to 310%. The firm generated about $4.5 million in profits from the transactions, prosecutors said.

Authorities said Cohen used portions of the proceeds for personal expenses, including home renovations, pool work, credit card payments and transfers to a romantic partner.

In a separate scheme, Cohen directed $500,000 from the accounts of Parsons and Lee to what he described as charitable donations to a nonprofit called Beast Basketball. Prosecutors said the players did not authorize the transfers and that roughly $238,000 of the money was used to build a gym at Cohen’s home. When questioned, Cohen told one player the funds had helped “future prospects” and “underprivileged kids,” according to court evidence.

Prosecutors also said Cohen diverted $328,125 from Parsons’ account to repay a former client, ex–Major League Baseball player Nyjer Morgan, who had demanded repayment over prior investments and loans. Parsons did not authorize the payment, authorities said.

A jury convicted Cohen of one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of investment adviser fraud, which carries a maximum sentence of five years. Sentencing is scheduled for a later date.

Clayton credited the FBI for its work on the case and thanked several U.S. attorneys’ offices and the U.S. Securities and Exchange Commission, which filed a parallel civil action, for their assistance.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.