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The Asset Recovery Case Of Cohen v. S.A.C. Trading Corp.

Posted in Asset Search/Fraud Investigation, Divorce & Child Support, Money Laundering, Securities Fraud, Tax Fraud

The New York Post and Bloomberg wrote last month about the appeal pending in Cohen v. S.A.C. Trading Corp., et. al., (11-1390-cv). The Cohen appeal is over the trial court’s March 30, 2011 dismissal of Patricia Cohen’s Second Amended Complaint.  The Second Amended Complaint accused Ms. Cohen’s ex-husband, (billionaire hedge fund manager Steven Cohen), of tax fraud, money laundering, securities fraud and other alleged crimes.

This complaint also pleaded civil RICO, common law fraud, breach of fiduciary duty and unjust enrichment claims because Mr. Cohen had purportedly hidden marital assets from Ms. Cohen during their 1990 divorce.  The gravamen of the complaint was that Mr. Cohen supposedly defrauded Ms. Cohen out of marital assets which she was arguably entitled to recover.

According to the complaint, Mr. Cohen had invested $8,745,169 dollars in co-op apartment conversions, with former attorney Brett K. Lurie.  By January 1987, Mr. Lurie had allegedly repaid Mr. Cohen $5.5 million of the $8,745,169 dollars.  The complaint claims the $5.5 million was a marital asset hidden by Mr. Cohen and omitted from his 1988 Statement of Financial Condition.  This financial statement identified the $8,745,169 dollar investment with Mr. Lurie as a “non-liquid asset”:

(To Read The Entire Financial Statement, Click On The Highlighted Excerpt)

At his appellant’s brief, Mr. Cohen argued that Ms. Cohen only speculated that the 1988 financial statement omitted the alleged $5.5 million dollar Brett Lurie payment.  His brief also said New York’s Equitable Distribution Law did not require “that divorcing spouses identify all income received during the marriage and where it came from.”  Among his other assertions, Mr. Cohen’s brief averred that Ms. Cohen’s claims were time-barred.

Mr. Cohen’s and the other brief’s filed in the appeal, are available below:

  1. Appellant’s August 1, 2011 Brief
  2. Appellee’s October 28, 2011 Brief
  3. Appellant’s November 14, 2011 Reply Brief

Copyright 2012 Fred L. Abrams