Preet Bharara, the United States Attorney for the Southern District of New York, announced that EMANUEL COHEN, the former chief executive officer of a Florida-based wholesaler and distributor of beauty products (the “Company”), was sentenced today to 27 months in prison for orchestrating a fraudulent scheme to obtain millions of dollars in loans by making false statements and providing fraudulent documents to two commercial banks based in New York (the “Banks”). COHEN pled guilty on June 23, 2015, before U.S. Magistrate Judge Sarah Netburn. Today’s sentence was imposed by U.S. District Judge Lewis A. Kaplan.
Manhattan U.S. Attorney Preet Bharara said: “Emanuel Cohen and his co-conspirators blatantly lied about their company’s financial condition to obtain millions of dollars in loans, which the company later defaulted on. I want to thank the FBI for their excellent investigative work on this case.”
According to the allegations contained in the information to which COHEN pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:
From 2007 through March 2014, COHEN and others engaged in a scheme to fraudulently induce the Banks to lend millions of dollars to the Company. Among other things, COHEN knowingly made false representations to the Banks, concealed material facts from the Banks, and submitted false and fraudulent documents to the Banks, including fabricated borrowing base certificates. Specifically, COHEN falsely inflated the Company’s sales and accounts receivable on borrowing base certificates that were provided to the Banks pursuant to loan agreements between the Banks and the Company. COHEN used those falsely inflated sales and accounts receivable to mislead the Banks about the Company’s true financial performance so that the Company could secure and draw down millions of dollars in loans from the Banks that the Company would not otherwise have been entitled to receive.
In March 2014, the Company defaulted on the loans at issue. At that time, the outstanding balance on the loans was more than $4.8 million.
In addition to his prison term, COHEN, 73, of Boca Raton, Florida, was sentenced to three years of supervised release, and ordered to pay forfeiture and restitution, both in the amount of $4,888,460.35.
Three other defendants in this matter, Jay Sosonko, the chief financial officer of the Company, Thomas Thompson, the sales manager of the Company, and Marc Wieselthier, the Company’s outside accountant, pled guilty for their roles in the fraudulent scheme. Sosonko, Thompson, and Wieselthier were sentenced to 16 months, 21 days, and 27 months in prison, respectively.
Mr. Bharara praised the investigative work of the FBI.
The case is being prosecuted by the Office’s Complex Frauds and Cybercrime Unit. Assistant U.S. Attorney Edward A. Imperatore is in charge of the prosecution.