SAN FRANCISCO -- Mouli Cohen, a founder of digital jukebox company Ecast Inc., was arrested Aug. 5 and charged the next day with 32 felony counts of wire fraud and money laundering by a federal grand jury, according to U.S. Attorney Joseph P. Russoniello. Cohen also faces up to $250,000 in fines on each count.
The indictment said Cohen perpetrated a complex, ongoing scheme from late 2002 to 2008 to defraud investors, including Vanguard Public Foundation, and more than 50 additional victims, according to an FBI release obtained through 7thSpace Interactive. Cohen exited Ecast in 2002.
Collectively, the FBI reports, victims paid more than $30 million over several years to acquire Cohen's Ecast stock and to pay for supposed costs associated with government regulatory approval of a pending stock swap deal with Microsoft -- a deal that Cohen promised was imminent. No such stock swap was ever contemplated.
The prosecution resulted from an investigation by the FBI and the IRS's criminal investigation division.
According to the San Francisco Chronicle, Vanguard and its onetime co-chairman, actor and activist Danny Glover, sued Cohen a year ago, saying the nonprofit organization had been "effectively destroyed" by the fraud scheme.
At the time Vanguard filed its suit, Ecast's attorney, Christopher Sundermeier, portrayed the jukebox company as another victim. He said Ecast never received any of the alleged investment funds from plaintiffs, knew about the alleged investment scheme and that Cohen was promising to sell his personal stock in the company. Sundermeier said Ecast filed a motion petitioning the court to dismiss the claims against it.
According to the San Jose Mercury-News, Cohen's attorney sent the paper an email containing a strong denial of the Ecast founder's being guilty of any of the charges. VT was unable to reach Cohen for comment.
Ecast chief executive John Taylor emphasized that Cohen has had nothing to do with the jukebox company, which is also a leader in place-based advertising, for years.
"Mouli Cohen has not been involved with the company since 2002 and the charges on which the federal grand jury indicted him are solely against him and do not directly affect the company," Taylor told VT.
"Ecast's business has not been affected by the ongoing legal matter against Mouli Cohen and the company continues to operate as a going concern," he added. "The current management team has no previous history or direct contact with him and as such had no involvement with his activities."