1 00:00:03,880 --> 00:00:10,060 In this episode of American Greed, in San Francisco, entrepreneur Samuel Mouly 2 00:00:10,060 --> 00:00:13,840 Cohen is sharing his secrets on how to succeed in business. 3 00:00:14,280 --> 00:00:17,000 And you want to come with your own recipe and your own secret sauce. 4 00:00:17,280 --> 00:00:18,820 Follow Cohen's advice. 5 00:00:19,300 --> 00:00:20,960 Surround yourself with the right people. 6 00:00:21,320 --> 00:00:24,460 And one day, you might have what he says he has. 7 00:00:24,780 --> 00:00:31,500 A mansion, a priceless art collection, a private jet. The opportunity out there 8 00:00:31,500 --> 00:00:32,500 for you is enormous. 9 00:00:33,230 --> 00:00:35,030 But here is the real secret. 10 00:00:35,490 --> 00:00:37,590 The house and the jet are rented. 11 00:00:38,010 --> 00:00:39,430 The art is fake. 12 00:00:39,830 --> 00:00:44,430 They are all just props used to sell victims the deal of a lifetime. 13 00:00:44,890 --> 00:00:48,830 If you're not enjoying it, it just doesn't work. You're not talking about 14 00:00:48,850 --> 00:00:54,550 you know, in some bar in San Francisco. You're at 32 ,000 feet, you know, doing 15 00:00:54,550 --> 00:01:00,230 .79 mach in a Gulfstream jet with a stewardess feeding you caviar. You give 16 00:01:00,230 --> 00:01:01,230 money away. 17 00:01:01,520 --> 00:01:07,180 Cohen's scheme is so cunning it turns a civic leader into a scammer and draws in 18 00:01:07,180 --> 00:01:10,580 big -name celebrities and trusting retirees. 19 00:01:10,900 --> 00:01:17,060 When it finally all collapsed around me and I had to realize that I had lost the 20 00:01:17,060 --> 00:01:20,500 entire 20 years of saving and earning. 21 00:01:20,740 --> 00:01:25,720 In court, the judge says it straight out. In more than 40 years in the 22 00:01:25,720 --> 00:01:29,560 justice system, he has never seen a con man like Moody Cohen. 23 00:01:43,080 --> 00:01:44,200 November 2005. 24 00:01:45,060 --> 00:01:49,580 Angry investors are heading to the multi -million dollar home of entrepreneur 25 00:01:49,580 --> 00:01:50,600 Muli Cohen. 26 00:01:51,760 --> 00:01:56,620 Two and a half years ago, they turned over millions to him, believing that his 27 00:01:56,620 --> 00:02:01,560 company was about to be acquired, that the stock he sold them would soar. Mr. 28 00:02:01,620 --> 00:02:05,400 Cohen represented that this acquisition was imminent. 29 00:02:05,640 --> 00:02:10,139 But for more than a year, all they hear are demands for more money. 30 00:02:10,650 --> 00:02:12,530 Pay up or lose the deal, they are told. 31 00:02:14,170 --> 00:02:17,190 Today, they will tell Cohen enough. 32 00:02:18,470 --> 00:02:21,290 The investors are fed up. They're angry. They don't know what's going on. 33 00:02:21,530 --> 00:02:25,930 But they spend just a few hours hearing his story, and surprisingly, their 34 00:02:25,930 --> 00:02:26,930 checkbooks open. 35 00:02:27,230 --> 00:02:33,970 They were so reassured, so convinced by Mr. Cohen that at least hundreds of 36 00:02:33,970 --> 00:02:37,430 thousands of dollars were forwarded to Mr. Cohen almost immediately. 37 00:02:38,070 --> 00:02:39,850 And the question is... 38 00:02:40,240 --> 00:02:43,440 What is the secret behind Muley's money machine? 39 00:02:46,960 --> 00:02:52,360 Behind many great cons, there is a rags -to -riches tale, and Muley Cohen is 40 00:02:52,360 --> 00:02:53,580 eager to tell his. 41 00:02:54,780 --> 00:03:00,320 He is born in Israel, the child of immigrants from the former Soviet Union. 42 00:03:00,320 --> 00:03:02,880 grows up in a one -bedroom apartment in Jerusalem. 43 00:03:03,850 --> 00:03:09,030 Years later, Cohen credits his success in part to the time he spends in the 44 00:03:09,030 --> 00:03:10,030 Israeli army. 45 00:03:14,450 --> 00:03:21,290 Coming to New York in 46 00:03:21,290 --> 00:03:24,550 1987, Cohen steps into the high -tech world. 47 00:03:24,910 --> 00:03:30,090 And by 1994, he is the CEO of Playnet, a video game company. 48 00:03:30,780 --> 00:03:37,080 Four years later, Playnet is bankrupt. But Cohen keeps that quiet and moves on 49 00:03:37,080 --> 00:03:38,180 to San Francisco. 50 00:03:38,720 --> 00:03:40,540 His timing is perfect. 51 00:03:42,140 --> 00:03:45,180 It is the era of the dot -com bubble. 52 00:03:45,720 --> 00:03:49,280 Every day you read about a new startup company. You heard about internet 53 00:03:49,280 --> 00:03:51,840 millionaires being made pretty much overnight. 54 00:03:52,880 --> 00:03:57,380 Cohen begins his own internet startup called eCast. 55 00:03:58,120 --> 00:04:03,440 In the days before iPods and iTunes, E -Cast sells jukeboxes for restaurants 56 00:04:03,440 --> 00:04:07,300 bars where customers can download music from the Internet. 57 00:04:07,780 --> 00:04:12,120 And that's what really helped him initially establish his bona fides. He 58 00:04:12,120 --> 00:04:14,900 tech company, and he was involved in tech, and he could speak the lingo. 59 00:04:16,110 --> 00:04:20,950 In a series of promotional videos, Cohen casts himself as a brilliant 60 00:04:20,950 --> 00:04:27,130 entrepreneur. Innovation is finding solutions for a process in an 61 00:04:27,130 --> 00:04:28,130 way. 62 00:04:29,090 --> 00:04:34,290 Just three years after he arrives in the Bay Area, Cohen is living a grandiose 63 00:04:34,290 --> 00:04:38,990 life of luxury in a mansion in Belvedere, one of the wealthiest towns 64 00:04:38,990 --> 00:04:42,970 California, with some of the best views money can buy. 65 00:04:43,610 --> 00:04:47,590 Many people testified about how beautiful that mansion was, how large 66 00:04:47,590 --> 00:04:53,750 mansion was, and the many staff people that Mr. Cohen employed at that house. 67 00:04:54,870 --> 00:05:01,310 But what no one is told is that Cohen is a renter, not an owner. 68 00:05:02,350 --> 00:05:07,490 When he first moved in there in 2002, I believe the monthly rent started at 69 00:05:07,490 --> 00:05:08,870 approximately $15 ,000. 70 00:05:10,030 --> 00:05:12,170 But that is a well -kept secret. 71 00:05:12,700 --> 00:05:17,840 And the picture Cohen presents of himself as a hugely successful 72 00:05:17,840 --> 00:05:18,840 convincing. 73 00:05:19,240 --> 00:05:23,740 If people do a great job, you want to be up to par with them. Mike Farrell, a 74 00:05:23,740 --> 00:05:26,900 roofing contractor in Bend, Oregon, is convinced. 75 00:05:27,320 --> 00:05:31,780 He meets Cohen at an ECAST party in San Francisco in the summer of 2000. 76 00:05:32,680 --> 00:05:33,700 I thought he was brilliant. 77 00:05:33,980 --> 00:05:39,060 This company had an entire floor in the financial district completely remodeled 78 00:05:39,060 --> 00:05:40,120 on New Montgomery Street. 79 00:05:41,140 --> 00:05:45,880 They had teams of Ivy League people that had had great success before. 80 00:05:46,380 --> 00:05:48,860 And they had a product that was truly amazing. 81 00:05:49,280 --> 00:05:50,280 It plays tunes. 82 00:05:50,600 --> 00:05:56,120 Almost immediately, Cohen embraces Farrell as a new friend, taking him on 83 00:05:56,120 --> 00:06:02,420 expensive vacations to Hawaii and Mexico, always on a private Gulfstream 84 00:06:02,880 --> 00:06:07,080 He would call and say, why don't you hop over to the city? Let's take the plane 85 00:06:07,080 --> 00:06:09,680 down to Marnie for lunch today. I met him at SFO. 86 00:06:10,750 --> 00:06:12,690 We took the plane to Monterey and had lunch. 87 00:06:13,450 --> 00:06:18,250 He tells Farrell he owns the jet and works overtime to hide the truth. 88 00:06:18,610 --> 00:06:23,170 He actually just rents it. The records show that Muley had to have his own 89 00:06:23,170 --> 00:06:27,890 on the jet. He had to have a sticker with his insignia on the jet so everyone 90 00:06:27,890 --> 00:06:29,470 would think that he owned it. 91 00:06:31,140 --> 00:06:32,860 That's what Mike Farrell believes. 92 00:06:33,260 --> 00:06:36,140 He believes a lot of what Cohen says. 93 00:06:36,700 --> 00:06:40,480 One day he said, you know, I'd really like to do something for you. I can give 94 00:06:40,480 --> 00:06:41,480 you a little rocket ship. 95 00:06:41,840 --> 00:06:45,800 You know, there's a transaction coming, and you'll make a nice little nest egg 96 00:06:45,800 --> 00:06:46,800 for your family. 97 00:06:47,240 --> 00:06:50,460 I felt very grateful that he was doing this for me. 98 00:06:51,600 --> 00:06:56,460 Cohen tells Farrell that ECAST is about to be taken over and offers him the 99 00:06:56,460 --> 00:06:59,980 chance to buy some of his founder's shares in the company. 100 00:07:00,810 --> 00:07:05,350 You're not talking about it, you know, in some bar in San Francisco. You're at 101 00:07:05,350 --> 00:07:12,090 32 ,000 feet doing .79 mach in a Gulfstream jet with a stewardess feeding 102 00:07:12,090 --> 00:07:14,910 caviar. I mean, it's very believable. 103 00:07:15,170 --> 00:07:19,030 And it's not one jet ride. It's jet ride after jet ride after jet ride. 104 00:07:19,690 --> 00:07:25,510 So Farrow takes out a few loans and pays Cohen for what he thinks are shares in 105 00:07:25,510 --> 00:07:27,550 ECAST, which will soon be acquired. 106 00:07:28,190 --> 00:07:33,210 He went as far as to take me to Wells Fargo, one of the top wealth management 107 00:07:33,210 --> 00:07:37,990 firms in San Francisco, to set up my account for the large amount of money 108 00:07:37,990 --> 00:07:38,789 I'm going to get. 109 00:07:38,790 --> 00:07:39,990 Who goes to that length? 110 00:07:41,570 --> 00:07:46,450 If the deal Cohen offers Farrell was real, it might be considered insider 111 00:07:46,450 --> 00:07:49,630 trading. But it is not real. It is fiction. 112 00:07:50,510 --> 00:07:52,950 Just like the claims he makes on his website. 113 00:07:53,450 --> 00:07:54,790 He claimed he had sold it. 114 00:07:55,070 --> 00:07:56,410 Company to Johnson and Johnson. 115 00:07:56,630 --> 00:07:58,550 That would make them much more focused. 116 00:07:58,870 --> 00:08:03,690 He claimed that he had done business with the Pritzker family of United 117 00:08:03,690 --> 00:08:05,070 and worldwide hotel fame. 118 00:08:05,570 --> 00:08:07,170 Is any of it true? 119 00:08:07,450 --> 00:08:12,730 We did not find evidence to substantiate those claims. 120 00:08:14,030 --> 00:08:16,210 Nor is there evidence of this claim. 121 00:08:16,940 --> 00:08:21,920 That because Mouly Cohen's businesses created so many jobs in the U .S., he 122 00:08:21,920 --> 00:08:27,680 awarded the first ever millionaire residency with full citizenship status 123 00:08:27,680 --> 00:08:30,220 41st President George H .W. Bush. 124 00:08:31,000 --> 00:08:32,059 It doesn't exist. 125 00:08:32,260 --> 00:08:35,900 They do allow people who are coming into the country to establish companies, 126 00:08:36,020 --> 00:08:41,240 certain visa rights, but you just can't buy your way into being a citizen. 127 00:08:42,350 --> 00:08:44,810 But you can buy your way into a friendship. 128 00:08:45,450 --> 00:08:50,510 And over time, all the money Mouly Cohen pretends to have puts Mike Farrell's 129 00:08:50,510 --> 00:08:52,570 mind entirely at ease. 130 00:08:53,050 --> 00:08:57,970 He spent exorbitant amounts of money, far more money than I ever put into 131 00:08:57,970 --> 00:09:02,290 shares. So there was never a thought in my mind that he needed my money. 132 00:09:02,910 --> 00:09:08,230 Cohen continues to offer more and more shares, and Farrell ends up with a $1 133 00:09:08,230 --> 00:09:09,430 million investment. 134 00:09:10,390 --> 00:09:15,530 Simple math, if 100 ,000 will become a million, then why not get a million 135 00:09:15,530 --> 00:09:17,470 dollars worth and make 10 million? 136 00:09:19,070 --> 00:09:22,950 After all, he thought he was doing business with a very good friend. 137 00:09:23,990 --> 00:09:27,230 He would have his personal doctor call the house to make sure you were okay if 138 00:09:27,230 --> 00:09:28,230 he thought you had a cold. 139 00:09:28,370 --> 00:09:33,050 I mean, he went to great lengths to convince you that he was a good friend, 140 00:09:33,050 --> 00:09:34,250 long as you were giving him money. 141 00:09:36,650 --> 00:09:40,850 But three years go by, and ECAST is not taken over. 142 00:09:41,390 --> 00:09:45,570 When Cohen offers additional shares, Farrell has to say no. 143 00:09:45,890 --> 00:09:46,890 He's out of money. 144 00:09:47,430 --> 00:09:53,750 As soon as we quit putting money in, all the phone calls stopped, all the jet 145 00:09:53,750 --> 00:09:58,010 rides stopped, and Muli was on to the next program, whoever that was or 146 00:09:58,010 --> 00:09:59,010 that unfolded. 147 00:09:59,270 --> 00:10:05,030 But, you know, overnight he went from, you know, my best friend, 10 calls a 148 00:10:05,070 --> 00:10:06,950 to... Complete radio silent. 149 00:10:07,450 --> 00:10:11,030 He sold people an image from his website. 150 00:10:11,370 --> 00:10:12,370 If you look at IBM. 151 00:10:12,650 --> 00:10:17,650 The life he lived with the house, with the Jets, and he had Ecast, and he had 152 00:10:17,650 --> 00:10:21,570 that connection to a legitimate company with his anchor, because everything else 153 00:10:21,570 --> 00:10:22,730 was a lie in his life. 154 00:10:23,570 --> 00:10:27,130 Next, from a roofer in Oregon to Hollywood stars, 155 00:10:27,830 --> 00:10:31,290 Mouly Cohen moves to the big time with a brand new line. 156 00:10:31,930 --> 00:10:36,330 My goal is to give my fortune back to society before I'm gone from this world. 157 00:10:48,690 --> 00:10:50,090 August 2002. 158 00:10:51,030 --> 00:10:56,490 Across the bay from San Francisco in the wealthy town of Belvedere, 30 guests 159 00:10:56,490 --> 00:10:59,090 are invited to dinner at the house of Muli Cohen. 160 00:10:59,880 --> 00:11:04,500 A self -described millionaire happy to share his secrets to success. 161 00:11:05,100 --> 00:11:07,800 The opportunity out there for you is enormous. 162 00:11:08,340 --> 00:11:14,640 Cohen is the founder of Ecast, an internet startup that sells virtual 163 00:11:14,640 --> 00:11:15,640 to bars. 164 00:11:16,460 --> 00:11:22,380 Recently, he has taken $1 million from Mike Farrell, an Oregon roofer, saying 165 00:11:22,380 --> 00:11:25,940 Ecast is about to be taken over. That never happens. 166 00:11:26,300 --> 00:11:28,300 But Cohen pockets the money. 167 00:11:28,810 --> 00:11:31,930 And tonight, he is setting the stage for a new scheme. 168 00:11:32,730 --> 00:11:38,990 He has invited a few local celebrities and one mega -movie star, the actor 169 00:11:38,990 --> 00:11:42,790 Glover. This is supposed to be his coming -out party, his debutante ball 170 00:11:42,790 --> 00:11:46,350 being a philanthropist. And he tells people he's got $50 million and he wants 171 00:11:46,350 --> 00:11:47,350 give it away. 172 00:11:48,790 --> 00:11:53,510 Philanthropy. I would say even 40 to 50 percent of blindness can be cured in the 173 00:11:53,510 --> 00:11:54,510 next five years. 174 00:11:54,810 --> 00:11:57,510 It is Muli Cohen's latest game. 175 00:11:57,980 --> 00:12:02,640 My goal is to give my fortune back to society before I'm gone from this world. 176 00:12:02,640 --> 00:12:06,760 think that anybody that can put a goal like that in front of them would feel 177 00:12:06,760 --> 00:12:10,820 very comfortable with himself, I think, in this world and in the next world. 178 00:12:11,220 --> 00:12:14,900 Tonight, the guest who takes the bait is Danny Glover. 179 00:12:15,160 --> 00:12:20,520 We are climbing Jacob's Ladder. Say, we are climbing Jacob's Ladder. Glover is a 180 00:12:20,520 --> 00:12:24,880 longtime activist and an enthusiastic supporter of a local charity. 181 00:12:25,450 --> 00:12:27,430 The Vanguard Public Foundation. 182 00:12:27,890 --> 00:12:33,110 A progressive activist group, Vanguard seeks to empower victims of social and 183 00:12:33,110 --> 00:12:34,130 economic injustice. 184 00:12:35,610 --> 00:12:39,850 In the Mission District, some of the original staff and board members of 185 00:12:39,850 --> 00:12:43,370 Vanguard come together to remember the Foundation's work. 186 00:12:44,070 --> 00:12:49,030 Evelyn Kelsey worked with Vanguard's idealistic founders, who were part of 187 00:12:49,030 --> 00:12:51,530 protest movements of the 1970s. 188 00:12:51,900 --> 00:12:56,540 They were united by a belief that basically wealth and power in society 189 00:12:56,540 --> 00:13:01,440 be redistributed. They wanted to do their part to contribute to social 190 00:13:01,440 --> 00:13:04,060 activism at the very grassroots level. 191 00:13:06,140 --> 00:13:11,460 Vanguard's mission is important to Glover. So when he learns that Muli 192 00:13:11,460 --> 00:13:16,280 money for a worthy cause, he tells Vanguard's president, Hari Dhillon. 193 00:13:16,760 --> 00:13:22,580 Ari had a long history of being a progressive or left -wing activist from 194 00:13:22,580 --> 00:13:23,980 days as a student activist. 195 00:13:24,960 --> 00:13:30,480 Rick Cohen is a reporter for the non -profit Quarterly. In covering stories 196 00:13:30,480 --> 00:13:35,380 Vanguard, he says he has watched Dillon's efforts to move the foundation 197 00:13:35,380 --> 00:13:39,200 grassroots grant -giving and into the national limelight. 198 00:13:39,720 --> 00:13:44,440 The goal was to see Vanguard have much more of an impact on progressive 199 00:13:44,440 --> 00:13:45,600 by having more resources. 200 00:13:45,880 --> 00:13:47,200 More money means more impact. 201 00:13:47,520 --> 00:13:53,520 I think there's another dimension to Hari, which is becoming a bigger actor 202 00:13:53,520 --> 00:13:57,740 himself and becoming seen as a major player. 203 00:14:00,780 --> 00:14:05,420 In 2002, Hari Dhillon sees his ticket to success. 204 00:14:06,140 --> 00:14:07,700 It is Muli Cohen. 205 00:14:08,750 --> 00:14:12,010 In September, Cohen and Dillon sit down for lunch. 206 00:14:12,890 --> 00:14:17,630 They have a meeting at Bob's Steakhouse in the Omni Hotel, and they ask Mouly 207 00:14:17,630 --> 00:14:22,210 for a donation, but Mouly has a counteroffer. Dillon later testifies at 208 00:14:22,210 --> 00:14:26,910 trial that he gets the same story as Mike Farrell, that ECAST is about to be 209 00:14:26,910 --> 00:14:31,870 taken over, this time by Microsoft, and Cohen is willing to sell shares of his 210 00:14:31,870 --> 00:14:34,130 founder's stock to Vanguard donors. 211 00:14:34,830 --> 00:14:37,530 Mouly's pitch to them was, you'll be able to... 212 00:14:37,950 --> 00:14:41,410 Make back the money you initially invested with me, and plus a little 213 00:14:41,410 --> 00:14:42,550 then give the rest to Vanguard. 214 00:14:43,110 --> 00:14:46,890 It sounds good to Dillon, and he accepts Cohen's offer. 215 00:14:47,530 --> 00:14:52,370 It was almost like the perfect storm of an organization looking to bring itself 216 00:14:52,370 --> 00:14:56,910 to the next level and someone who saw that here's an influx of money for me. 217 00:14:57,530 --> 00:14:59,670 And when it came together, it was just devastating. 218 00:15:00,670 --> 00:15:05,350 But Hari Dillon doesn't see the danger, and he goes to work for Muli Cohen. 219 00:15:05,950 --> 00:15:10,150 persuading Vanguard donors to buy Cohen's stock in ECAST. 220 00:15:10,350 --> 00:15:11,750 I think Harry was a mark. 221 00:15:12,110 --> 00:15:18,810 Mouley offered him and the investors a big deal, but he needed somebody 222 00:15:18,810 --> 00:15:21,490 to basically make the deal work. 223 00:15:23,030 --> 00:15:28,250 To make the deal work, Dylan looks to Diablo, California, where one of 224 00:15:28,250 --> 00:15:34,170 Vanguard's wealthy supporters has a home, Sam Mills, heir to the 3M fortune. 225 00:15:37,420 --> 00:15:42,440 Mills declined the request for an interview from American Greed, but he 226 00:15:42,440 --> 00:15:47,960 testifies in Cohen's trial, saying that in November 2002, he is invited to the 227 00:15:47,960 --> 00:15:49,440 mansion in Belvedere. 228 00:15:49,740 --> 00:15:54,740 He reports, I was very impressed with Mr. Cohen, with his home, with his 229 00:15:54,740 --> 00:15:55,740 presentation. 230 00:15:55,980 --> 00:16:02,780 And he's impressed with his art collection, paintings by Picasso, 231 00:16:04,170 --> 00:16:10,810 I'm picking my art because the most iconic pieces bet the S andP by at least 232 00:16:10,810 --> 00:16:14,290 which is a pretty good track record. 233 00:16:14,670 --> 00:16:18,650 Cohen claims that his art collection is worth $30 million. 234 00:16:19,310 --> 00:16:24,290 That might be true if the paintings were originals, but these are reproductions 235 00:16:24,290 --> 00:16:26,350 created by a local artist. 236 00:16:26,890 --> 00:16:30,870 Bully commissioned him to recreate some of these pieces that he liked. 237 00:16:31,530 --> 00:16:34,070 And he wanted them done in a way that they looked authentic. 238 00:16:34,470 --> 00:16:35,990 So they had to be weathered. 239 00:16:36,230 --> 00:16:40,570 So if a piece was painted in the 1920s, it had to look like it was painted in 240 00:16:40,570 --> 00:16:41,570 the 1920s. 241 00:16:43,730 --> 00:16:46,790 But Sam Mills does not see through the charade. 242 00:16:47,570 --> 00:16:51,050 Mouly's making this offer that it's going to be a win -win for everybody. 243 00:16:51,050 --> 00:16:54,310 Sam says, Mouly, this is a great thing you're doing for us. 244 00:16:54,530 --> 00:16:58,050 And Cohen's con on Vanguard is good to go. 245 00:17:00,430 --> 00:17:04,970 Over the coming months, Mills sends $800 ,000 to Mouly Cohen. 246 00:17:06,089 --> 00:17:08,450 Danny Glover is in for more than $2 million. 247 00:17:09,710 --> 00:17:15,890 Singer Harry Belafonte, actor Delroy Lindo, and director Robert Altman also 248 00:17:15,890 --> 00:17:16,890 money into the deal. 249 00:17:17,609 --> 00:17:23,530 They are later bought out by other Vanguard donors who send Cohen $6 .2 250 00:17:23,869 --> 00:17:28,310 believing they are buying 2 .3 million shares of Ecast. 251 00:17:29,610 --> 00:17:34,710 And in the spring of 2003, the news on the deal is all good. 252 00:17:35,370 --> 00:17:41,190 Mr. Dillon testified that Mr. Cohen was having dinner at his home with Bill 253 00:17:41,190 --> 00:17:43,170 Gates and Steve Ballmer of Microsoft. 254 00:17:43,690 --> 00:17:48,770 Mr. Cohen relayed that at that dinner, they had reached a handshake deal on 255 00:17:48,770 --> 00:17:54,390 Microsoft acquiring Ecast and the approximate price that that acquisition 256 00:17:54,390 --> 00:17:55,089 take place. 257 00:17:55,090 --> 00:17:58,570 Of course, there is no dinner and no pending acquisition. 258 00:17:59,400 --> 00:18:04,400 But the investors buy the story and eventually come to believe that Cohen's 259 00:18:04,400 --> 00:18:06,240 could bring in $80 million. 260 00:18:07,100 --> 00:18:09,700 A portion of the profits will go to Vanguard. 261 00:18:10,980 --> 00:18:16,860 But years later, the marriage between social justice activists and a man 262 00:18:16,860 --> 00:18:20,280 dedicated to showcasing his wealth raises questions. 263 00:18:21,740 --> 00:18:26,360 Vanguard Foundation made grants to people like the Native American Treaty 264 00:18:26,360 --> 00:18:27,360 Council. 265 00:18:27,590 --> 00:18:31,690 which is composed of the poorest people in the Bay Area. 266 00:18:31,990 --> 00:18:35,750 And those are the values that our grant making spoke to. 267 00:18:36,270 --> 00:18:40,390 You're doing this for the benefit of the Native American Treaty Council? 268 00:18:40,770 --> 00:18:41,830 Give me a break. 269 00:18:42,230 --> 00:18:47,270 Coming up on American Greed, Mouly Cohen's wife, Stacy, publishes a look 270 00:18:47,270 --> 00:18:49,070 her fabulous billionaire lifestyle. 271 00:18:49,690 --> 00:18:53,050 The book encapsulates the whole story of Mouly Cohen. 272 00:18:53,290 --> 00:18:54,950 It was all other people's money. 273 00:18:55,440 --> 00:18:59,560 The trips, the jewelry, the life that they were living inside the book was 274 00:18:59,560 --> 00:19:00,560 completely a lie. 275 00:19:11,880 --> 00:19:14,440 2005, San Francisco. 276 00:19:14,900 --> 00:19:18,920 It's been more than two years since donors of the Vanguard Public Foundation 277 00:19:18,920 --> 00:19:22,100 invested $6 million with Muley Cohen. 278 00:19:22,860 --> 00:19:28,380 They believe Cohen's virtual jukebox company, Ecast, is going to be bought 279 00:19:28,380 --> 00:19:29,380 by Microsoft. 280 00:19:29,700 --> 00:19:32,440 And when it does, they'll all be rich. 281 00:19:32,880 --> 00:19:36,600 But it is taking far longer than anyone ever expected. 282 00:19:37,020 --> 00:19:40,920 After the first few months, of course, Ecast isn't acquired by Microsoft. 283 00:19:40,920 --> 00:19:43,640 knows what's going on, and the excuses are coming out from Muli. 284 00:19:44,320 --> 00:19:46,600 Excuses seemingly backed by headlines. 285 00:19:46,960 --> 00:19:51,340 The European Union's case against Microsoft charging unfair competition. 286 00:19:52,090 --> 00:19:56,370 is said to be holding up the deal, and each delay comes with a price tag. 287 00:19:56,930 --> 00:20:01,590 Emails from Harry Dillon quote Cohen saying that bonds and legal fees must be 288 00:20:01,590 --> 00:20:06,310 paid. You need a stamping fee, and nobody knew what a stamping fee was, 289 00:20:06,310 --> 00:20:07,470 course, they paid it. 290 00:20:07,810 --> 00:20:13,430 They pay because, according to Sam Mills, they are told if they don't, they 291 00:20:13,430 --> 00:20:16,490 be stripped of their shares and lose everything. 292 00:20:17,610 --> 00:20:19,970 And so he continues to send in money. 293 00:20:21,150 --> 00:20:24,130 adding millions of dollars to his original investment. 294 00:20:25,850 --> 00:20:30,810 Finally, in November, he and a few other investors insist on a face -to -face 295 00:20:30,810 --> 00:20:32,210 meeting with Mouley Cohen. 296 00:20:34,650 --> 00:20:37,590 The investors are fed up. They're angry. They don't know what's going on. 297 00:20:40,370 --> 00:20:42,650 For some, it's the first time they've been to the house. 298 00:20:43,410 --> 00:20:47,590 So, of course, you're seeing the artwork. You're seeing the way he's 299 00:20:48,990 --> 00:20:51,730 Against your better judgment, well, this is how it really works in the real 300 00:20:51,730 --> 00:20:57,270 world. Sam Mills reports that Cohen says you're playing with the big boys now 301 00:20:57,270 --> 00:21:01,290 and tells them there is just one more bond to pay. 302 00:21:02,490 --> 00:21:05,370 And the Cohen con works again. 303 00:21:06,290 --> 00:21:12,330 They were so reassured and so convinced by Mr. Cohen that at least hundreds of 304 00:21:12,330 --> 00:21:15,310 thousands of dollars were forwarded to Mr. Cohen almost immediately. 305 00:21:15,920 --> 00:21:22,520 One week after the meeting, Sam Mills writes a check, $805 ,000 to Mouly 306 00:21:22,880 --> 00:21:25,660 A week later, $200 ,000. 307 00:21:26,180 --> 00:21:29,520 The next day, another $200 ,000. 308 00:21:30,260 --> 00:21:35,400 As his investors write checks to protect a deal that does not exist, Cohen has 309 00:21:35,400 --> 00:21:36,400 another secret. 310 00:21:36,580 --> 00:21:40,540 He is no longer even associated with ECAST in any way. 311 00:21:40,860 --> 00:21:44,880 More than a year before the meeting in November, he was forced out. 312 00:21:45,440 --> 00:21:49,040 He was no longer the CEO. He was no longer the chairman. He wasn't an 313 00:21:49,240 --> 00:21:53,300 So he would have no knowledge if there were any acquisition. 314 00:21:53,560 --> 00:21:55,460 Now, of course, there never was one. 315 00:21:56,880 --> 00:22:02,320 But according to Hari Dhillon's testimony, Cohen continues to demand 316 00:22:02,320 --> 00:22:05,640 more money to protect the deal he has made with Vanguard donors. 317 00:22:06,320 --> 00:22:09,260 And Dhillon widens his search for cash. 318 00:22:10,000 --> 00:22:12,680 Hari began looking to other kinds of investors. 319 00:22:14,600 --> 00:22:18,920 People who are smaller investors, people who are being asked to give out of 320 00:22:18,920 --> 00:22:22,340 their pocket, people who are being asked to give out of their personal savings, 321 00:22:22,540 --> 00:22:25,340 not people who had millions of dollars to invest. 322 00:22:27,920 --> 00:22:33,740 People like my Alice child, a retired nurse who has recently sold her house 323 00:22:33,740 --> 00:22:35,940 has $300 ,000 to invest. 324 00:22:36,460 --> 00:22:41,660 She learns through her daughter who works at Vanguard that Hari Dhillon has 325 00:22:41,660 --> 00:22:42,940 investment opportunity. 326 00:22:43,820 --> 00:22:48,700 The only details I had gotten is that Dylan was going to invest in this 327 00:22:48,700 --> 00:22:52,820 that was being bought out by Microsoft. And I heard the words Microsoft, and I 328 00:22:52,820 --> 00:22:57,500 thought, well, that's a safe bet. Of course it'll be safe. My money will be 329 00:22:57,500 --> 00:23:01,740 there. And so I wrote them a check for $300 ,000. 330 00:23:03,420 --> 00:23:08,260 With Alice Child's money secured, Dylan moves on to find more investors. 331 00:23:09,260 --> 00:23:14,160 Eventually, he will raise close to $25 million from people who think they are 332 00:23:14,160 --> 00:23:16,320 part of an e -cast Microsoft deal. 333 00:23:17,120 --> 00:23:21,660 And at this point, Dylan still believes that the deal will come through. 334 00:23:22,300 --> 00:23:27,520 They were so deep into it. It was like, well, let's stay with it because we 335 00:23:27,520 --> 00:23:30,800 believe it's going to happen, we hope it's going to happen, and it better 336 00:23:30,800 --> 00:23:35,980 happen. Next on American Greed, what Cohen is really doing with investors' 337 00:23:36,240 --> 00:23:37,720 money. I documented. 338 00:23:38,410 --> 00:23:43,010 Emily Cohen spent approximately $2 .1 million just in jewelry. They purchased 339 00:23:43,010 --> 00:23:45,450 vehicles for approximately $700 ,000. 340 00:23:56,950 --> 00:24:02,670 In the summer of 2007, the news in the computer world is that Microsoft is 341 00:24:02,670 --> 00:24:07,410 engaged in a fight with the European Union over charges of unfair 342 00:24:08,400 --> 00:24:13,060 For Mouly Cohen's investors still waiting for Microsoft to buy eCast, the 343 00:24:13,060 --> 00:24:15,260 stories support what they are being told. 344 00:24:16,280 --> 00:24:21,900 In Alameda, my Alice child has $300 ,000 invested in the deal. 345 00:24:22,380 --> 00:24:28,500 I kept getting these emails about how the European Union is holding up the 346 00:24:28,500 --> 00:24:30,700 with Microsoft, and I thought, oh, well, that's typical. 347 00:24:31,320 --> 00:24:33,960 But Mouly Cohen is working on it. 348 00:24:35,210 --> 00:24:39,810 Harry Dillon reports that Cohen says he is flying to Europe to do battle for the 349 00:24:39,810 --> 00:24:41,370 Vanguard Foundation investors. 350 00:24:43,290 --> 00:24:47,090 And in November, Cohen boards a rented private jet. 351 00:24:47,850 --> 00:24:49,530 But he's not going to Europe. 352 00:24:50,030 --> 00:24:53,570 He's headed to Las Vegas. 353 00:24:54,910 --> 00:24:56,730 He goes on vacation with their money. 354 00:24:57,190 --> 00:25:01,030 They're telling them that he's in negotiations and things are looking good 355 00:25:01,030 --> 00:25:02,030 things are getting better. 356 00:25:03,240 --> 00:25:07,240 He and his wife, Stacy, are getting away, just for one night. 357 00:25:07,500 --> 00:25:12,880 But the bill for their stay at the Bellagio comes to $5 ,862. 358 00:25:14,060 --> 00:25:19,800 A tiny fraction of the $5 .5 million he and Stacy spend on travel in just seven 359 00:25:19,800 --> 00:25:20,800 years. 360 00:25:21,840 --> 00:25:27,200 Recently, Stacy has self -published a book called The Kosher Billionaire's 361 00:25:27,200 --> 00:25:28,200 Secret Recipe. 362 00:25:28,780 --> 00:25:31,480 There, she writes about her travels with Muli. 363 00:25:32,360 --> 00:25:37,880 Would you like to spend a week in New York, board a plane, doze off, and wake 364 00:25:37,880 --> 00:25:38,779 in the Caribbean? 365 00:25:38,780 --> 00:25:40,220 I do it frequently. 366 00:25:40,640 --> 00:25:46,200 But I do not take for granted the super -performance Gulf Stream I travel on. 367 00:25:46,560 --> 00:25:52,000 The book, which cost $1 million to create, is a kind of how -to book. 368 00:25:52,340 --> 00:25:54,740 How to spend enormous amounts of money. 369 00:25:54,960 --> 00:25:59,100 The money came from victims, and it was all other people's money. The trips, the 370 00:25:59,100 --> 00:26:00,100 jewelry. 371 00:26:00,270 --> 00:26:02,990 The life that they were living inside the book was completely a lie. 372 00:26:03,330 --> 00:26:06,590 Juan Saavedra is an investigator with the IRS. 373 00:26:07,010 --> 00:26:11,610 Because he works undercover, he asked to be interviewed in Silhouette. 374 00:26:11,970 --> 00:26:17,250 I documented that Malik Cohen spent approximately $2 .1 million just in 375 00:26:17,250 --> 00:26:19,450 from 2002 to 2009. 376 00:26:20,330 --> 00:26:26,070 $1 .4 million of that goes to a diamond ring for Stacey. 377 00:26:26,570 --> 00:26:28,990 He purchased vehicles. 378 00:26:29,820 --> 00:26:35,180 for approximately $700 ,000 during this same time period. I documented $2 .8 379 00:26:35,180 --> 00:26:40,780 million on personal expenses for rent for the personal chef security company. 380 00:26:42,060 --> 00:26:46,280 To support his lavish lifestyle, Cohen needs investors. 381 00:26:47,800 --> 00:26:54,060 And by 2006, he is courting Javier Barrio, a real estate developer who owns 382 00:26:54,060 --> 00:26:55,620 house not far from Cohen. 383 00:26:58,120 --> 00:27:03,080 Again, Moley sees somebody who's got some wealth and starts a friendship and 384 00:27:03,080 --> 00:27:04,800 talks about his investment opportunities. 385 00:27:05,940 --> 00:27:11,320 Barrio declined an interview request from American Greed, but in a statement 386 00:27:11,320 --> 00:27:16,140 the FBI, he writes that Cohen offers him a once -in -a -lifetime chance to 387 00:27:16,140 --> 00:27:17,300 invest in his companies. 388 00:27:19,020 --> 00:27:24,720 Like Mike Farrell, Barrio is courted by Cohen with trips by private jet to Las 389 00:27:24,720 --> 00:27:26,900 Vegas, to Monterey. 390 00:27:28,400 --> 00:27:32,060 Burillo invests $8 million in Cohen's ventures. 391 00:27:32,780 --> 00:27:37,820 And then, in 2008, he asks Cohen to be his son's godfather. 392 00:27:39,860 --> 00:27:45,620 He writes, I admit it was an effort to appeal to Cohen's conscience. 393 00:27:46,300 --> 00:27:51,000 And Cohen accepts the honor. He becomes a godfather to Burillo's son. 394 00:27:53,040 --> 00:27:55,700 But the end of the story is familiar. 395 00:27:57,460 --> 00:28:01,220 Eventually, the money dries up and Muley doesn't speak to him anymore. 396 00:28:01,980 --> 00:28:06,280 People are only two uses to Muley, either money or a means to find other 397 00:28:06,280 --> 00:28:07,280 with money. 398 00:28:07,580 --> 00:28:11,620 There's nobody that Muley's dealt with that we've seen with any sort of genuine 399 00:28:11,620 --> 00:28:12,620 relationship. 400 00:28:13,160 --> 00:28:15,660 And that applies even to his family. 401 00:28:18,240 --> 00:28:23,740 In Lubbock, Texas, Cohen's father -in -law, Robert Stripling, is a 402 00:28:25,060 --> 00:28:26,780 Muley knew that he had some money. 403 00:28:27,160 --> 00:28:31,500 from his investment accounts and from his retirement accounts and convince his 404 00:28:31,500 --> 00:28:36,440 father -in -law to invest in ECAS. Again, with the same story, ECAS was 405 00:28:36,440 --> 00:28:40,160 be taken over by Microsoft and you're going to make a lot of money. 406 00:28:40,900 --> 00:28:46,700 And so Dr. Stripling liquidates his IRA, takes a second mortgage on his house, 407 00:28:46,820 --> 00:28:52,620 and wires in all $3 .4 million to his son -in -law, Muli Cohen. 408 00:28:55,470 --> 00:28:59,570 But years go by, and the promised deal does not come through. 409 00:29:00,110 --> 00:29:02,310 Money for stripling gets tight. 410 00:29:02,650 --> 00:29:06,630 He didn't have enough money to live on because he'd given almost everything to 411 00:29:06,630 --> 00:29:12,250 movies, so he couldn't pay for simple repairs like fixing a stove, fixing a 412 00:29:12,250 --> 00:29:13,250 in the roof. 413 00:29:13,950 --> 00:29:19,190 As 2007 comes to an end, Harvey Dillon reports to Vanguard investors. 414 00:29:20,040 --> 00:29:23,900 that Cohen is returning to Europe to attend the final meeting of negotiations 415 00:29:23,900 --> 00:29:25,040 with the EU. 416 00:29:27,020 --> 00:29:33,900 No one needs to know that he and Stacey are actually in St. 417 00:29:34,160 --> 00:29:35,160 Martin. 418 00:29:35,420 --> 00:29:42,260 That year, Stacey's father, Robert Stripling, sends them a holiday 419 00:29:42,260 --> 00:29:47,380 note. He writes, Except for being poor, we have had a very pleasant time. 420 00:29:48,460 --> 00:29:55,400 And he adds, All I want for Christmas is for Muli to replace my IRAs. Love, Dad. 421 00:29:56,600 --> 00:30:01,980 Next on American Greed, hear the little secret Harry Dillon is keeping all to 422 00:30:01,980 --> 00:30:07,880 himself. It's just unfathomable that, frankly, a foundation executive would 423 00:30:07,880 --> 00:30:09,980 engage in that kind of activity. 424 00:30:10,660 --> 00:30:16,960 Learn more secrets to business success from Muli Cohen at AmericanGreed .CNBC 425 00:30:16,960 --> 00:30:17,960 .com. 426 00:30:18,650 --> 00:30:19,690 Feeling greedy? 427 00:30:20,230 --> 00:30:22,830 Want more than your share of behind -the -scenes dirt? 428 00:30:23,050 --> 00:30:25,730 Follow at AmericanGreedTV on Twitter. 429 00:30:25,990 --> 00:30:27,050 We'll be right back. 430 00:30:38,930 --> 00:30:45,710 In 2006, the major donors of the Vanguard Public Foundation have put 431 00:30:45,710 --> 00:30:47,310 faith and money into one man. 432 00:30:48,080 --> 00:30:54,160 Bully Cohen. People should not feel to fail, and they should be accountable for 433 00:30:54,160 --> 00:30:55,059 their mistakes. 434 00:30:55,060 --> 00:30:59,360 The Vanguard donors are throwing millions of dollars not into the 435 00:30:59,700 --> 00:31:05,320 but into Cohen's investment scheme that promises them and the foundation a huge 436 00:31:05,320 --> 00:31:11,000 windfall. Eventually, more than 50 investors will pony up close to $31 437 00:31:11,680 --> 00:31:17,400 Looking back to that time, former board member Leslie Wozniak is outraged. 438 00:31:17,880 --> 00:31:22,980 To see that Vanguard had been transformed into really a rolling casino 439 00:31:22,980 --> 00:31:27,880 of a foundation supporting social justice movements was absolutely 440 00:31:28,560 --> 00:31:31,440 And the gamble is destroying the foundation. 441 00:31:32,260 --> 00:31:36,740 At a Vanguard board meeting, former Berkeley Mayor Gus Newport, who was 442 00:31:36,740 --> 00:31:40,920 considering joining the board, learns how dire the situation is. 443 00:31:41,400 --> 00:31:43,460 Halfway through the meeting, I said, look, I'm out of here. 444 00:31:43,660 --> 00:31:45,380 You all got some decisions to make. 445 00:31:46,370 --> 00:31:48,150 you're going to have to lay off some staff. 446 00:31:48,930 --> 00:31:52,670 And some of the board members said, please, don't leave, don't leave. I 447 00:31:52,710 --> 00:31:53,810 no, no, I'm out of here. 448 00:31:54,910 --> 00:32:00,530 At that time, the once highly respected Vanguard Public Foundation is not just 449 00:32:00,530 --> 00:32:03,870 broke, it is more than $2 million in debt. 450 00:32:05,010 --> 00:32:06,790 Over time, more and more... 451 00:32:07,000 --> 00:32:11,500 of the money went to the investment scheme, less and less effort was put 452 00:32:11,500 --> 00:32:15,000 raising money for the charity until the point where the charity was basically 453 00:32:15,000 --> 00:32:16,160 not even functioning. 454 00:32:16,720 --> 00:32:20,280 But the foundation continues to hand out grants. 455 00:32:20,820 --> 00:32:27,160 One goes to Poder, a nonprofit group run by Antonio Diaz that supports Latino 456 00:32:27,160 --> 00:32:28,960 immigrants in the Mission District. 457 00:32:29,860 --> 00:32:35,400 We got a grant and received partial payment for it. 458 00:32:35,610 --> 00:32:42,010 and we waited and waited, and I called, and we didn't get any responses. 459 00:32:42,810 --> 00:32:48,290 Beth Rosales was appointed Vanguard's first executive director in 1982. 460 00:32:49,010 --> 00:32:53,970 I was really disturbed when I saw a letter that eight grantees hadn't 461 00:32:53,970 --> 00:33:00,070 money, and I thought, something's amiss, because in our field, you never grant 462 00:33:00,070 --> 00:33:03,510 money and not come through. 463 00:33:03,810 --> 00:33:04,950 How could the board... 464 00:33:05,200 --> 00:33:09,800 had been authorizing grants, knowing that the money wasn't there and people 465 00:33:09,800 --> 00:33:12,260 weren't raising the money to make it happen either. 466 00:33:12,560 --> 00:33:18,020 And I think the answer has to be they continued to believe what Harvey told 467 00:33:18,020 --> 00:33:20,820 them. They let themselves be conned. 468 00:33:21,400 --> 00:33:25,240 And where is Dylan while his foundation is dying? 469 00:33:26,220 --> 00:33:30,180 Vanguard supporters see him eating at the finest restaurants in town. 470 00:33:31,180 --> 00:33:35,280 staying at luxury hotels and being driven around by a hired driver. 471 00:33:36,540 --> 00:33:42,200 Strange, considering his annual salary is less than $90 ,000, it seems Dillon 472 00:33:42,200 --> 00:33:44,620 has been telling a few lies too. 473 00:33:46,080 --> 00:33:52,720 Mr. Dillon testified at trial that at some point he also stole money from 474 00:33:52,720 --> 00:33:53,720 some of the donors. 475 00:33:54,000 --> 00:33:59,440 When some of the money came in, he did not pass it all on to Mr. Cohen. 476 00:34:00,090 --> 00:34:02,570 And he testified that he kept some of it. 477 00:34:03,530 --> 00:34:08,850 Hari Dhillon, the man entrusted with the funds of a well -respected charity, has 478 00:34:08,850 --> 00:34:14,170 been skimming money for himself, pocketing millions of investors' dollars 479 00:34:14,170 --> 00:34:16,750 support his own lavish lifestyle. 480 00:34:17,989 --> 00:34:22,070 And I was thinking, oh my lord, how is that possible? 481 00:34:23,070 --> 00:34:28,070 It's just unfathomable that, frankly, a foundation executive would engage. 482 00:34:28,920 --> 00:34:29,920 in that kind of activity. 483 00:34:32,260 --> 00:34:37,500 Dylan later tells investigators that he was simply borrowing money until the big 484 00:34:37,500 --> 00:34:40,659 payday when Microsoft finally buys eCast. 485 00:34:41,060 --> 00:34:44,000 He thought that once the deal goes through, there's going to be so much 486 00:34:44,060 --> 00:34:46,900 they'll be able to pay everybody back, and there's no harm, no foul. 487 00:34:47,340 --> 00:34:48,560 But there is harm. 488 00:34:49,480 --> 00:34:54,320 The small community groups Vanguard set out to help are not getting the money 489 00:34:54,320 --> 00:34:55,320 they are promised. 490 00:34:56,110 --> 00:35:00,870 That bit of capital they're getting from a vanguard is crucial money. It's 491 00:35:00,870 --> 00:35:04,450 treating the people served by those groups cavalierly. It's treating the 492 00:35:04,450 --> 00:35:05,630 community poorly. 493 00:35:06,130 --> 00:35:11,250 And many in the community who once respected Hardy Dillon now feel betrayed 494 00:35:11,490 --> 00:35:18,190 It boggles my mind. I don't understand the connection between someone 495 00:35:18,190 --> 00:35:24,810 having a value of, you know, working for social justice and yet falling into. 496 00:35:25,310 --> 00:35:30,410 Some form of glamour, perhaps, or self -aggrandizement. Those two things are 497 00:35:30,410 --> 00:35:36,230 incompatible. Next on American Greed. After six years and $31 million, 498 00:35:36,750 --> 00:35:40,170 Cohen and his investors meet in court. 499 00:35:40,410 --> 00:35:46,450 His wife is sitting there with diamonds on her finger in the audience of these 500 00:35:46,450 --> 00:35:47,630 group of victims. 501 00:35:48,350 --> 00:35:51,430 I thought, how dare you show your face here? 502 00:36:02,600 --> 00:36:07,220 For six years, Vanguard Foundation supporters who believed they had 503 00:36:07,220 --> 00:36:11,100 shares in ECAST do exactly what they are told. 504 00:36:11,560 --> 00:36:12,980 Everything had to be a secret. 505 00:36:13,200 --> 00:36:15,360 Moody said, you can't breathe a word of this to anyone. 506 00:36:15,760 --> 00:36:17,700 Deal comes out, everything is lost. 507 00:36:18,060 --> 00:36:23,520 But Sam Mills testifies at Cohen's trial that in 2008, calls to venture 508 00:36:23,520 --> 00:36:26,860 capitalists working with ECAST revealed the truth. 509 00:36:27,720 --> 00:36:32,320 that there had never been any relationship at all between ECAST and 510 00:36:34,760 --> 00:36:40,980 Devastated by the news, in December, Mills, Hari Dhillon, and another 511 00:36:40,980 --> 00:36:45,080 drive to a restaurant in Tiburon to meet with Cohen. 512 00:36:47,140 --> 00:36:48,400 They let Muli talk. 513 00:36:48,720 --> 00:36:52,000 It's just, again, the same story. It's just around the corner. Things are going 514 00:36:52,000 --> 00:36:53,400 well. Things are great. 515 00:36:54,280 --> 00:36:57,000 But now they know Cohen is lying. 516 00:36:57,690 --> 00:37:02,510 They then confronted him with what they had learned and asked for his reaction 517 00:37:02,510 --> 00:37:03,510 to it. 518 00:37:03,850 --> 00:37:07,430 Well, he's taken a little back, a little bit of back, and he has to recover a 519 00:37:07,430 --> 00:37:10,050 minute, but he's like, well, of course we told you that. The deal's a secret. 520 00:37:10,210 --> 00:37:12,070 They're not going to tell you. You know, trust me. 521 00:37:12,790 --> 00:37:17,390 Another witness testified that when they threatened litigation, that Mr. Cohen 522 00:37:17,390 --> 00:37:20,990 responded, he figured that the statute of limitations had run out. 523 00:37:23,600 --> 00:37:27,600 Shortly after the meeting, Muley Cohen makes a fast exit. 524 00:37:29,260 --> 00:37:36,140 He moves to a new mansion in Southern California and is arrested in August 525 00:37:36,920 --> 00:37:41,920 He returns to San Francisco and stands trial in October 2011. 526 00:37:43,200 --> 00:37:48,240 The government casts Cohen as the cunning perpetrator of a devastating 527 00:37:48,240 --> 00:37:52,700 scheme. scamming more than 50 investors out of $31 million. 528 00:37:53,640 --> 00:37:59,600 But Cohen's defense attorneys, like Mark Topel, point the finger at Ari Dillon. 529 00:37:59,740 --> 00:38:06,400 Everything that's attributed to Mouly Cohen is almost 99 % of the time Dillon 530 00:38:06,400 --> 00:38:12,260 talking to other people about what Cohen supposedly said without any 531 00:38:12,260 --> 00:38:16,300 documentation other than Dillon's own word. 532 00:38:16,760 --> 00:38:20,980 Cohen's attorney argues that the additional millions of dollars investors 533 00:38:20,980 --> 00:38:25,560 Cohen over the years were actually to purchase shares in a new legitimate 534 00:38:25,560 --> 00:38:27,380 company Cohen was starting. 535 00:38:27,780 --> 00:38:32,140 And all those stories about the Department of Justice and the European 536 00:38:32,140 --> 00:38:33,860 delaying the ECAS deal? 537 00:38:34,360 --> 00:38:39,280 It was all a total amount of baloney, and it all came from Dillon. 538 00:38:39,940 --> 00:38:43,220 For the jury, the question is, who is lying? 539 00:38:43,620 --> 00:38:45,600 Hari Dillon or Muli Cohen? 540 00:38:46,960 --> 00:38:49,900 The verdict, the liar's mooly coin. 541 00:38:51,080 --> 00:38:55,560 But Dylan admits he did skim money from investors for his own use. 542 00:38:56,060 --> 00:39:01,720 And in July 2010, he pleads guilty to wire fraud and money laundering. 543 00:39:02,500 --> 00:39:05,740 He is later sentenced to 40 months in prison. 544 00:39:06,500 --> 00:39:09,200 And his investors face the truth. 545 00:39:10,520 --> 00:39:13,780 I'd never dreamed in a million years that... 546 00:39:14,230 --> 00:39:19,970 Hari had turned her money over to a complete shyster. I felt so ashamed and 547 00:39:19,970 --> 00:39:26,910 devastated when it finally all collapsed around me, and I had to realize that I 548 00:39:26,910 --> 00:39:33,510 had lost the entire 20 years of saving. 549 00:39:33,990 --> 00:39:36,810 It was gone, and I was utterly bereft. 550 00:39:38,430 --> 00:39:42,890 Investors lose millions, and the community loses Vanguard. 551 00:39:43,950 --> 00:39:45,910 The foundation is closed. 552 00:39:46,890 --> 00:39:50,950 The real victim are these small groups that don't really have very many places 553 00:39:50,950 --> 00:39:55,310 to go, that are doing community organizing and social services. The fact 554 00:39:55,310 --> 00:40:00,010 they got defunded as a result of the mismanagement of Vanguard and the scam 555 00:40:00,010 --> 00:40:03,270 involving Hari and Muli is a real crime. 556 00:40:03,570 --> 00:40:07,770 Today, longstanding supporters of the foundation like Evelyn Kelsey 557 00:40:08,520 --> 00:40:13,440 are working to raise money to repay those who did not receive promised 558 00:40:13,880 --> 00:40:19,080 The ideals and the legacy of the Vanguard Foundation have just been 559 00:40:19,080 --> 00:40:19,819 the face. 560 00:40:19,820 --> 00:40:24,060 And I don't want that to be what people remember about Vanguard. 561 00:40:24,500 --> 00:40:31,200 I want to see those ideals blossom again and try to heal 562 00:40:31,200 --> 00:40:33,820 a just horrible, horrible wound. 563 00:40:36,430 --> 00:40:43,050 In November 2011, Muley Cohen is convicted of 15 counts of wire fraud, 11 564 00:40:43,050 --> 00:40:46,310 of money laundering, and 3 counts of tax evasion. 565 00:40:47,130 --> 00:40:50,470 Cohen is later sentenced to 22 years. 566 00:40:52,830 --> 00:40:56,150 His victims will likely never see their money again. 567 00:40:56,810 --> 00:40:59,050 Some, like Mike Farrell, have recovered. 568 00:40:59,310 --> 00:41:03,370 He has rebuilt his business and bought a ski house to enjoy with his kids. 569 00:41:04,140 --> 00:41:09,760 And he's comforted by the caliber of the other people Cohen conned. I came from 570 00:41:09,760 --> 00:41:14,380 a blue -collar middle America, but there was a lot of very smart people around 571 00:41:14,380 --> 00:41:19,460 Mouly. They gave Mouly all of their money. He was very cunning, and he was 572 00:41:19,460 --> 00:41:20,460 believable. 573 00:41:21,480 --> 00:41:24,800 It was a grand show that he put on for many years. 574 00:41:25,500 --> 00:41:30,000 And looking back, many see that the one thing he had going for him was that he 575 00:41:30,000 --> 00:41:32,320 looked just so outrageously rich. 576 00:41:32,960 --> 00:41:36,500 People thought, this is all legit. How could he be stealing from so many people 577 00:41:36,500 --> 00:41:38,660 at such a level to keep this up? 578 00:41:39,020 --> 00:41:45,220 Mully strikes me as having been a consummate con artist, but in a way a 579 00:41:45,220 --> 00:41:47,500 low -level or second -rate one. 580 00:41:47,740 --> 00:41:53,620 This guy had so little to offer other than trusting him personally. It is kind 581 00:41:53,620 --> 00:41:55,900 of striking that he pulled this off. 582 00:41:56,980 --> 00:42:00,420 My Alice Child attends his sentencing hearing. 583 00:42:01,230 --> 00:42:06,930 His wife is sitting there with diamonds on her finger in the audience of the 584 00:42:06,930 --> 00:42:08,230 group of victims. 585 00:42:08,470 --> 00:42:11,450 I thought, how dare you show your face here? 586 00:42:13,010 --> 00:42:16,830 Stacey Cohen is not charged with any wrongdoing in the case. 587 00:42:17,090 --> 00:42:22,270 At the hearing, the judge holds up the kosher billionaire's book and says, it 588 00:42:22,270 --> 00:42:27,210 speaks itself of an obscene lifestyle that has no set of decent values to it. 589 00:42:28,400 --> 00:42:32,640 He adds that in more than 40 years in the criminal justice system, he has 590 00:42:32,640 --> 00:42:35,040 seen a con man like Mouly Cohen. 591 00:42:36,120 --> 00:42:39,840 I would have to agree with him. I've never seen someone at this level 592 00:42:39,840 --> 00:42:40,840 such a fraud like this. 593 00:42:41,440 --> 00:42:47,380 The lies to everybody that he met, the type of lifestyle he was living, was 594 00:42:47,380 --> 00:42:50,000 outrageous. And you don't see that every day.