Ecast Founder gets 22 years for fraud

09/05/2012

Last month, the founder of US digital jukebox company Ecast, Samuel “Mouli” Cohen (pictured) was sentenced to 22 years in prison for defrauding over 100 victims, including the actor Danny Glover.

Convicting Cohen, U.S. District Judge Charles Breyer described him as “nearly sociopathic” for refusing to show remorse to his victims who he had encouraged to invest in Ecast by telling them the digital jukebox company was about to be acquired by Microsoft Corp.

The fraud caused the collapse of the nonprofit charity Vanguard Public Foundation, which Glover and singer Harry Belafonte founded in 1972, prosecutors said.

Cohen used the money from investors to fund his lavish lifestyle of private jets, gaudy jewelry and Swiss bank accounts.

“In more than 40 years of experience with the criminal justice system, I have never encountered a con man like Mr. Cohen,” the Judge said during the trial.

Prosecutors said the swindle began in 2002 when Cohen approached Glover and Hari Dillon, who were leaders of the nonprofit Vanguard Public Foundation. The charity was launched in 1972 and distributed grants to a wide-range of social causes often on the far left on the political spectrum such as anti-war movements.

Cohen told Vanguard leaders that Microsoft was poised to buy Ecast and offered to sell shares to Glover, Vanguard and others affiliated with the charity for $3.50 each, promising extraordinary returns once the acquisition closed, prosecutors said.

Over the years, Cohen claimed the acquisition was being held up by U.S. regulators and then their counterparts in Europe. He returned several times to the investors and recruited new ones with pleas for more money to clear the alleged regulatory hurdles. Cohen said the deal would die without the additional funds, prosecutors said. Vanguard and many of its key donors and others invested at least $30 million with Cohen, prosecutors said. Vanguard was forced to close its doors after the scheme was exposed in 2008.

In another twist to this strange tale, Ecast told the US magazine Vending Times that  Mouli Cohen left the company in 2002, roughly when these dealings began. An Ecast attorney said  the firm has had “ongoing” legal problems with Cohen, including two cases filed in 2003 and 2004 against Cohen about “very similar” charges that were settled out of court. If it was true that Dillon, Glover, and the Vanguard Public Foundation investors thought they were buying Ecast stock, they were doing so with a guy who had been out of Ecast’s picture for years.

Ecast shut down its jukebox network on March 1, 2012.

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