Advertisement

Maryland businessman seeks to undo guilty plea

Maryland businessman seeks to undo guilty plea
Jeff Cohen, founder of the Indemnity Insurance Corp. (Algerina Perna / Baltimore Sun)

A former insurance executive who was convicted of running a "Ponzi-type fraud" and accused of plotting to kill Delaware's lieutenant governor is trying to withdraw his guilty plea, arguing that prosecutors misled him.

Jeffrey B. Cohen, 39, of Reisterstown filed a motion to withdraw his plea on the eve of his sentencing Tuesday. U.S. District Judge William D. Quarles Jr. agreed to postpone sentencing to next month and to hear Cohen's argument.

Advertisement

Cohen built his company, Indemnity Insurance Corp., into a major player in bar and nightclub insurance. But prosecutors said he was misleading regulators about company finances and defrauding millions of dollars from clients to support a lavish lifestyle.

Cohen was charged with wire fraud, obstruction of justice, making false claims to regulators and money laundering, among other charges.

He represented himself at his trial in June. Four days into the proceeding, he pleaded guilty to wire fraud, aggravated identity theft, making false statements to an insurance regulator and obstruction of justice. Prosecutors have said he faces a maximum sentence of 57 years.

Cohen contends that he agreed to the plea deal after a promise by prosecutors that the government would not seize assets that were solely in his wife's name. But after he entered his plea, he says, he learned that authorities had liquidated one of his wife's bank accounts among $140 million in assets they are targeting.

"Cohen and his standby counsel ... were hoodwinked by the government and coerced into signing" the plea agreement, Cohen wrote in his motion Monday.

Prosecutors have said there were discussions and agreements about which assets would be returned to Cohen's wife, but they did not include the account in question.

"The defendant never represented ... that the government had agreed to the return of all of his wife's bank accounts, because the United States specifically described in the plea the items it had agreed to return," Assistant U.S. Attorney Harry Gruber wrote.

Cohen built a business reputation as a fighter; his promotional materials showed a man being socked in the face with a boxing glove, and he regularly took competitors, clients, former employees and neighbors to court.

He has taken that style into the criminal proceedings, firing his appointed attorneys, filing lawsuits against the government and angering a judge by violating a court order. There have been hundreds of filings in the case.

During the trial, Gruber said Cohen used fake wire transfers, financial statements, bank statements, screen shots of bank account information and letters of credit to trick a rating agency, regulators and banks to make it appear that his company had more money than it did.

Gruber said Cohen also created a web of companies, used aliases and stole the identities of real people to facilitate the scheme.

Gruber said Cohen fabricated records of cash infusions of millions of dollars into the company, and also secured web addresses and made fake email accounts to pose as bank officials and trick a rating agency.

Delaware regulators seized Indemnity in 2013. The company's collapse left major judgments unpaid and clients across the country without insurance.

Prosecutors say Cohen also took "substantial steps" toward killing Delaware's then-Lt. Gov. Matthew Denn, a Delaware judge and two other men. They found high-powered rifles, maps to the officials' homes, a recording of Cohen explaining the plot, and a storage unit containing a large amount of ammonium nitrate, which can be used to make explosives.

Advertisement

Cohen scoffed at the allegations. He said the rifle was for a planned hunting trip in Africa. Disguises found in his home were for a "masquerade ball" he was putting together, he said, and the alleged "bomb-making materials" were for a project he was working on to build a hydrogenerator and for use in a workshop in which he built guitars.

The writings about violence were from "creative writing journals," he said, and similar comments on a voice recorder were ideas for a movie script.

He told jurors that there were no victims of the alleged financial fraud, and that "nobody lost any money."

"Just because the government says it's true doesn't make it so," he told jurors. "They think they can do anything they please because nobody stops them."

Cohen pleaded guilty during the trial.

Cohen ran into more trouble in May when U.S. Magistrate Judge Timothy J. Sullivan indicated that he intended to initiate criminal contempt proceedings against Cohen for transporting an external hard drive from the federal courthouse to the Chesapeake Detention Facility, in violation of a court order.

Sullivan later said he would not pursue holding Cohen in contempt, but believed it should be addressed at his sentencing.

Cohen first raised the issue of his wife's liquidated account a few days after his guilty plea. At the time, he asked only that the government return the money to his wife.

After the government balked, Cohen sought to undo the plea and is again contesting the allegations against him.

Quarles agreed to hear Cohen's motion to withdraw his plea Sept. 8. If he upholds the guilty plea, Quarles said, a two-day sentencing hearing would follow on Sept. 9 and 10.

Prosecutors are seeking a forfeiture from Cohen of more than $140 million, plus his collection of custom guitars, watches, antique toys, a painting of Jack Nicholson, and life-size statues of the Terminator and the Blues Brothers.

Advertisement
Advertisement