Wednesday, August 28, 2013

Celebrities, Among Others, Cheated In $29 Million Charity Fraud

by Gary Snyder


A federal appeals court in San Francisco upheld the conviction and 22-year sentence of a former Belvedere businessman who defrauded investors of $29.7 million.
Some of the victims of Samuel “Mouli” Cohen were patrons of the now-defunct Vanguard Public Foundation, including actors Danny Glover and Harry Belafonte.
The San Francisco-based foundation, which supported progressive causes such as civil rights and anti-poverty programs, closed in 2009 as a result of financial mismanagement and Cohen’s fraud.
Federal prosecutors alleged in a sentencing brief last year Cohen caused the collapse of Vanguard because its donors could no longer afford to support it after they lost millions of dollars they invested with Cohen in a phony deal concerning an electronic jukebox company.
Cohen, 55, was given the prison term by U.S. District Judge Charles Breyer in San Francisco last year after a jury convicted him in 2011 of 29 counts of wire fraud, money laundering and tax evasion.
Breyer ordered him to pay $29.7 million in restitution to more than 60 victims, including $410,000 to Belafonte and $2,758,221 to Glover.
According to the court, Cohen invited foundation donors to buy shares in an digital jukebox company he co-founded, Ecast Inc., and told them the share value was about to skyrocket because the company was soon to be acquired by Microsoft Inc.
The investors were told they could gain profits both for themselves and for donations to the foundation.
Cohen took in the investors’ money between 2002 and 2008, according to the indictment.
In a separate fraud-within-a-fraud case, former foundation executive director Hari Dillon pleaded guilty before Breyer in 2010 to two counts of wire fraud and two counts of money laundering and admitted to embezzling at least $2.5 million between 2004 and 2007 from foundation patrons who had previously invested money with Cohen.
Dillon admitted in his plea agreement that the embezzled money came from additional funds he solicited from the donors by telling them Cohen needed loans to pay the costs of completing the supposed deal.
But Dillon admitted that he siphoned off $2.5 million of the intended loan money for himself. Prosecutors said he spent the funds on expensive hotels, restaurants, limousines, credit card bills and his children’s tuition.
As part of his plea agreement, Dillon aided prosecutors in investigating Cohen and testified against Cohen in his 2011 trial.
In January, Breyer sentenced Dillon to three years and four months in prison. (source)


Nonprofit Imperative gathers its information principally from public documents...some of which are directly quoted. Virtually all cited are in some phase of criminal proceedings; some have not been charged, however. Cites in various media: Featured in print, broadcast, and online media outlets, including: Charity Navigator, Vermont Public Radio, Miami Herald, National Public Radio (NPR), Huffington Post, The Sun News, Atlanta Journal Constitution, Wall Street Journal (Profile, News and Photos), “Betrayal”, (a movie), NBC (on Charity Fraud…TBD), FOX2, ABC Spotlight on the News, WWJ Radio, Marie Claire, Ethics World, Aspen Philanthropy Newsletter, Harvard Business Review, Current Affairs, Charity Navigator, The Chronicle of Philanthropy, St. Petersburg Times, Board Room Insider, USA Today Topics, Accountants News, Newsweek.com, Responsive Philanthropy Magazine, New York Times, Portfolio Magazine, The Virgin Islands Daily News, NANKAI (China) BUSINESS REVIEW, National Religious Broadcasters newsletter, The Charity Governance Blog, American Chronicle, Palm Beach Post, Detroit Free Press, Oakland Press, Nonprofit World, Socially Responsible Business Forum, PNNOnline, Ohio Nonprofit Resources, Nonprofit Good Practice Guide, Nonprofit Startup Guide, Nonprofit Blog, National Coalition of Homeless Newsletter, Finance and Administration Roundtable Newsletter, MichiganNonprofit.com, CORP! Magazine, Crain’s Michigan Nonprofit, ncrp.org, PhilanTopic, Nashville Free Press, Nonprofit Law Blog, Seniors World Chronicle, Carnegie Reporter, Assoc. of Certified Fraud Examiners Examiner, msnbc.com, Worchester (MA) Telegram and Gazette, Carnegie Corporation of America, EO Tax Journal, Wikipedia: Non-profit Organizations; Parent: Wise Austin, Accountants News, Veterans Today, Answers.com, Far-roundtable, #Nonprofit Report, nonprofithelpnews, nonprofit news; National Enquirer, Northwest Herald, The HelpWise Daily, The #Nonprofit Report, Wikipedia (Nonprofit Organization), Answers.com, Nonprofits: On the Brink (2006) Silence: The Impending Threat to the Charitable Sector (2011)
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