The founder of a Baltimore County insurance company arrested this week in connection with an alleged scheme to mislead regulators about the financial health of the firm consented Friday to remain in detention for now.
Jeffrey Cohen, former CEO of nightclub and bar insurer Indemnity Insurance Corp., faces federal charges of making false statements to an insurance regulator. His attorney, Joe Murtha, said Cohen has the right to request a later hearing to determine whether the court will release him.
"At this time, there's really nothing to say," Murtha said.
According to the indictment, Cohen told regulators his company — physically based in Sparks but domiciled for regulatory purposes in Delaware — had $5.1 million in unencumbered cash that didn't exist.
When Delaware's insurance agency tried to confirm the amount with the bank, "Cohen thwarted the Insurance Department's inquiries by providing a false post office box, telephone number, fax number, and email address," according to a ruling by Delaware's Supreme Court related to the liquidation of Indemnity.
Cohen has denied the Delaware regulators' allegations of fraud. He said the company was financially sound and preparing to go public when the state seized it.