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Judge orders insurance executive held due to flight risk

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A nightclub insurance mogul charged with fraud will remain detained after prosecutors alleged that bomb-making equipment and musings on killing discovered after his indictment — along with notes about disappearing in Croatia — made him too risky to release.

The Wednesday hearing in federal court in Baltimore marked Jeffrey B. Cohen's first appearance since the allegations of an apparent plot to attack a Delaware judge and another elected official became public in an unsealed search warrant.

His attorney called the allegations "patently absurd," noted that the Reisterstown man has yet to be charged with anything except making false statements to regulators and argued that he should be released.

"He's a fighter, but he's a fighter in the courtroom," said Brendan Hurson, a public defender appointed to represent Cohen.

Federal prosecutors disclosed new information about evidence found at Cohen's properties, including that he was holding ammonium nitrate — an explosive used in the Oklahoma City bombing — in a storage facility.

Cohen himself disclosed new information, too, blurting out the name of the official whose home was one of two which authorities allege he visited on a "reconnaissance mission" in June: Delaware Lt. Gov. Matthew Denn, the insurance commissioner there for four years.

Authorities had kept Denn's name redacted from court records and didn't name him during the hearing. Denn was alerted to the allegations in late June, according to his chief of staff, who declined to comment further.

Cohen, a former nightclub bouncer, grew his Sparks-based Indemnity Insurance Corp. into one of the largest insurers of clubs and bars in the country. But authorities have alleged that Cohen significantly overstated his company's assets, and set up websites and sent phony emails to cover it up.

Delaware regulators seized the company last year and are liquidating it. The ripples from Indemnity's collapse reach across the country, leaving major judgments unpaid and former clients in difficult circumstances.

In court Wednesday, Cohen's attorney said the entrepreneur has no prior criminal record and is not a threat to anyone. Hurson reminded the judge that Cohen faces charges only for a nonviolent, regulatory offense.

"Never in the history of the federal court has someone been detained, charged with giving a false statement to regulators," Hurson said.

Cohen had a constitutional right to gather firearms and to "muse about anything he wants to," Hurson said. He described the guns as an example of his client's "exciting life," which included high-end sports cars, a waterfront property in Florida and a trip to a rock-and-roll fantasy camp.

A friend in Hollywood discussed making a movie with him and encouraged Cohen to write down his thoughts, Hurson said. That Cohen was simply working on a movie script "may sound crazy," Hurson said, but he equated it to a high-school graduate building a major insurance company from scratch — which Cohen did.

As describing a real-life plot rather than one intended for a movie, the allegations make no sense, Hurson said. "Why would he write it down, why would he record it?"

In arguing that Cohen should remain in custody, Assistant U.S. Attorney Joyce McDonald said, "The facts taken together paint an overwhelming picture."

Cohen had experience using fake identities to perpetuate fraud, she said. The financial fraud he is accused of is "extensive, it's vast," McDonald said.

She said he cashed out a life insurance policy in January and wrote a will in June.

After detailing weapons he ordered this year, she played recordings Cohen made of himself driving to the home of J. Travis Laster, a Delaware judge overseeing the liquidation of Cohen's business, and the home of Denn.

"Society needs to look at the fact that killing isn't wrong in certain circumstances, and killing culls the weak," Cohen could be heard saying in the recording. "Killing culls the wrong so that society can have a better chance of survival without certain obstacles."

McDonald said "there are no conditions of release that would be satisfactory."

U.S. Magistrate Judge Timothy Sullivan appeared to be contemplating Cohen's release on strict terms, asking if family and friends could assemble property and other assets that could be held as collateral to keep Cohen from fleeing prosecution.

But the judge later ruled that Cohen should continue to be held, deeming him a flight risk and danger to the community. Sullivan pointed to the weapons, the trip to Delaware, the recording Cohen made "and his mental health issues that I think are apparent in this case." The judge did not elaborate.

Cohen's mother, who had been sobbing during an earlier break in the hearing, gasped as the judge issued the ruling.

Cohen walked into court Wednesday in a burgundy jumpsuit, hands shackled, head freshly shaved. He brought a large shopping bag filled with papers and books that he spread across the trial table. He flipped through pages and pointed to passages as his attorneys spoke.

At the end of the hearing, as Cohen stood to be taken back to detention, he called out the name that authorities had tried to keep under wraps.

"Lt. Gov. Matthew Denn — that's the other elected official," he said.

jfenton@baltsun.com

jhopkins@baltsun.com

Copyright © 2014, The Baltimore Sun
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