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1 MELINDA HAAG (CASBN 132612)

United States Attorney
2
BRIAN J. STRETCH (CASBN 163973)
3 Chief, Criminal Division
4 JEFFREY R. FINIGAN (CASBN 168285)
Assistant United States Attorney
5
450 Golden Gate Ave., Box 36055
6 San Francisco, California 94102
Telephone: (415) 436-7200
7 Fax: (415) 436-7234
email: jeffrey.finigan@usdoj.gov
8
9 Attorneys for Plaintiff
10 UNITED STATES DISTRICT COURT
11 NORTHERN DISTRICT OF CALIFORNIA
12 SAN FRANCISCO DIVISION
13
UNITED STATES OF AMERICA, ) No. CR 10-0547 SI
14 )
Plaintiff, ) UNITED STATES’ OPPOSITION TO
15 ) DEFENDANT’S MOTION TO VACATE
v. ) DETENTION ORDER AND TO ADMIT
16 ) DEFENDANT TO BAIL
)
17 SAMUEL COHEN, ) Date: October 19, 2010
a/k/a Mouli Cohen, ) Time: 10:00 a.m.
18 ) Court: Hon. Susan Illston
Defendant. )
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1 TABLE OF CONTENTS
2 I. Burden of Proof and Factors to Consider . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3 II. Factual Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4 A. The Defendant’s Scheme To Defraud Underlying The Indictment . . . . . . . . . . . . . . . . . . 1
5 B. The Detention Hearing Before Judge Nagle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
6 C. The Defendant’s Phone Calls Since Being Arrested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
7 D. The Defendant’s Proposed Bail Packages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
8 III. There Are Several Misrepresentations In The Defendant’s Motion . . . . . . . . . . . . . . . . . . 8
9 A. The Defendant Has Never Cooperated With The Government . . . . . . . . . . . . . . . . . . . . . 8
10 B. Many Statements in the Motion are False and Others are Irrelevant . . . . . . . . . . . . . . . 10
11 IV. The Defendant Is Properly Detained And The Motion Should Be Denied . . . . . . . . . . . . 12
12 V. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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1 TABLE OF AUTHORITIES
2 FEDERAL CASES
3 United States v. Evans, 62 F.3d 1233 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
4 United States v. Gentry, 455 F. Supp. 2d 1018 (D. Ariz. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . 13
5 United States v. Koenig, 912 F.2d 1190 (9th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
6 United States v. Kouyoumdjian, 601 F. Supp. 1506 (C.D. Cal. 1985) . . . . . . . . . . . . . . . . . . . . . 1
7 United States v. Madoff, No. 09-1025, 2009 WL 728379, at *2
(C.A. 2 (N.Y) Mar. 20, 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8
United States v. Motamedi, 767 F.2d 1403 (9th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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United States v. Reynolds, 956 F.2d 192 (9th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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United States v. Stanford, 630 F. Supp. 2d 751 (S.D. Tex 2009) . . . . . . . . . . . . . . . . . . . . . . . . 13
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FEDERAL STATUTES
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18 U.S.C. § 3142(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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18 U.S.C. § 3142(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1, 8
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1 The defendant has filed a Motion to Vacate Detention Order and Admit Defendant to
2 Bail (the “Motion”). The government opposes the Motion on the basis that the detention order
3 by United States Magistrate Judge, Margaret Nagle, of the Central District of California, was
4 well-reasoned and based on plentiful facts establishing a serious risk of flight and danger to the
5 community. Further, additional information set forth herein combined with the fact that the
6 defendant’s proposed bail package is now significantly inferior to the one proposed to Judge
7 Nagle should compel this Court to deny the Motion.
8 I. Burden of Proof and Factors to Consider
9 Judge Nagle ordered the defendant detained based on findings that he is both a flight risk
10 and a danger to community. Exhibit A to Finigan Declaration filed concurrently herewith. The
11 defendant’s request to vacate that order must be made to this Court, since this Court has original
12 jurisdiction of the matter. United States v. Evans, 62 F.3d 1233, 1238 (9th Cir. 1995). This Court
13 now reviews Judge Nagle’s order de novo. United States v. Koenig, 912 F.2d 1190, 1191 (9th
14 Cir. 1990). Detention is appropriate where a defendant is either a danger to the community or a
15 flight risk; it is not necessary to prove both. United States v. Motamedi, 767 F.2d 1403, 1406
16 (9th Cir. 1985); United States v. Kouyoumdjian, 601 F. Supp. 1506, 1508-10 (C.D. Cal. 1985).
17 The government bears the burden of showing that the defendant is a flight risk by a
18 preponderance of the evidence and that the defendant poses a danger to the community by clear
19 and convincing evidence. Motamedi, 767 at 1407; 18 U.S.C. § 3142(f). Applying these
20 standards, the Court must determine whether there are conditions of release that will reasonably
21 assure the appearance of the defendant and the safety of any other person and the community.
22 18 U.S.C. § 3142(g). The Court must consider: (1) the nature and circumstances of the offense;
23 (2) the weight of th evidence; (3) the history and characteristics of the defendant; and (4) the
24 nature and seriousness of the danger posed by the defendant’s release. 18 U.S.C. § 3142(g).
25 II. Factual Background
26 A. The Defendant’s Scheme To Defraud Underlying The Indictment
27 Although long running and complex in its execution, the defendant’s scheme to defraud
28 was relatively straightforward on its face. In short, the defendant defrauded victims by selling

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1 them shares of Ecast stock for $2.00 or $3.50 per share while lying to them that Ecast was about
2 to be acquired by Microsoft. All told, the victims purchased 2,211,500 shares of Ecast for a total
3 of $5,854,000 between October 2002 and July 2003. During the time the defendant was selling
4 these Ecast shares to the victims, he was fully aware that Ecast was not going to be acquired by
5 Microsoft and that the Ecast shares were worth less than 10 cents each. Further, based on
6 records compiled by Ecast related to the defendant’s stock transfers during the time period in the
7 indictment, the defendant sold more shares of Ecast than he possessed. Between November
8 2000 and May 2003 the defendant sold more than 6,000,000 shares of Ecast – and this figure
9 does not even include the Ecast shares the defendant fraudulently sold to the victims underlying
10 the indictment or his father-in-law. According to various stock purchase agreements, the most
11 Ecast shares the defendant ever possessed was 5,000,000 or 6,000,000. Either way, the
12 defendant sold millions of shares of Ecast beyond what he owned.
13 After the initial investments, the defendant advised one victim, Hari Dillon, who in turn
14 advised other investors, that Microsoft’s acquisition of Ecast was final pending regulatory
15 approval by the United States and EU. In 2004, the defendant began telling Dillon that there
16 were certain fees involved with obtaining U.S. and EU approval and that the investors would
17 have to pay their share of the costs and if they did not pay their share of the fees that they would
18 lose their shares and their investments. The defendant regularly made these demands of Dillon
19 and the investors from approximately July 2004 through January 2008. All told, the victims paid
20 another approximately $30,000,000 (on top of the original investment) towards alleged fees and
21 costs associated with finalizing Microsoft’s alleged acquisition of Ecast.
22 In late 2008, the victims finally discovered that the defendant had been lying about
23 Microsoft’s acquisition of Ecast. Dillon and two other victims, met with the defendant in
24 approximately December 2008 and the defendant once again repeated his lies about the
25 Microsoft/Ecast deal coming to a close as soon as EU approval was finalized. Dillon and the
26 other victims confronted the defendant that they knew there was no such deal and the meeting
27 ended shortly thereafter. A number of civil lawsuits were filed in connection with the
28 defendant’s fraudulent scheme and they have been consolidated in San Francisco Superior Court

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1 under Case No. 09-488442 and are pending. Within a few months of this confrontation in
2 December 2008, the defendant vacated his rented mansion in Belvedere and moved to Beverly
3 Hills to avoid the victims from the indictment, nearly all of whom live in the Bay Area.
4 The defendant was indicted on July 15, 2010, and a no-bail warrant issued with the
5 indictment. The defendant was arrested on the warrant in Los Angeles in early August of 2010.
6 B. The Detention Hearing Before Judge Nagle
7 On August 12, 2010, a few days after his arrest, the defendant had a detention hearing in
8 Los Angeles before Judge Nagle. At the detention hearing the government set forth most of the
9 facts underlying the indictment and pointed out the following: (1) the defendant has sent more
10 than $3,000,000 to Swiss bank accounts within the last 2 years; (2) the defendant has perpetrated
11 this same scheme to defraud on other individuals (including his father-in-law from whom he
12 stole more than $7,000,000 beginning in July 2003); (3) the defendant and his wife have lived an
13 extravagant and luxurious lifestyle financed by the proceeds of the defendant’s fraud; (4) the
14 defendant is an Israeli and U.S. citizen; (5) the defendant was (prior to his incarceration) a
15 frequent international traveler; (6) despite reaping millions from his schemes, the defendant has
16 failed to pay taxes for years; (7) the defendant is 52 years old and his sentence exposure is
17 decades by statute and more than 15 years by the guidelines and will include millions of dollars
18 in restitution; (8) the defendant has no ties to the NDCA since moving away in 2009 to get away
19 from the victims; and (9) in addition to the fraudulent scheme, the government has evidence that
20 the defendant has walked away from numerous significant debts and simply has no conscience
21 when it comes to taking people’s money.
22 For example, with respect to this last point, as of July 20, 2010, the defendant owed
23 Prime Jet $275,000 for private jet rentals, Jet Edge $20,000 for private jet rentals, AmEx
24 $170,000 for a variety of personal expenses, and Javier Burillo several million dollars for
25 defrauding him in connection with investments unrelated to Ecast. Since the hearing, the
26 government has also learned that the defendant has refused to pay his former counsel, the
27 Skadden Arps firm, millions of dollars in fees and costs. See fn 3 infra.
28

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1 As the transcript from the hearing shows, Judge Nagle’s main concern was the amount of
2 money the defendant stole and the fact that he refused to account for any of it to the Court.
3 Judge Nagle asked defense counsel at least four separate times “where is the money” and she
4 never received an answer. Exhibit A to Defense Motion at 14-17. Judge Nagle stressed that the
5 lack of information from the defendant regarding the money “creates a real question for this
6 Court with respect to is there money available elsewhere.” Id., at 16. “How come he’s got
7 nothing to post, the wife’s got nothing to post? The Court is very concerned.” Id., at 17.
8 Judge Nagle’s concerns were entirely reasonable and logical and this Court should have
9 the same ones. And, since the defendant continues his refusal to explain what he did with tens of
10 millions of dollars, this Court should arrive at the same conclusion as Judge Nagle. Judge Nagle
11 found that “the bail resources being offered are [not] adequate to mitigate the risk of flight in this
12 case.” Id., at 34.1 Judge Nagle articulately summed up the core reason for detaining the
13 defendant:
14 What the Court is really focused on is the access to money. The access to money
typically brings with it the access to evade all of the constraints put upon someone that
15 should limit their ability to flee. Where there is a lot of money at stake or to be had or
accessible to a defendant, the ways of fleeing are greater than they are to someone
16 without that kind of access to funds. Id., at 39.
17 Judge Nagle also found the defendant poses a danger to the community: “the defendant
18 poses a risk to the safety of other persons or the community because of the seriousness of the
19 allegations in the indictment which suggest that he presents an economic danger to the
20 community.” Id., at 41.
21 C. The Defendant’s Phone Calls Since Being Arrested
22 Since being taken into custody, the defendant has been held in a number of different
23 facilities between Los Angeles and the NDCA. Along the way, the defendant’s phone calls have
24
25 1
Although Judge Nagle did not take it into consideration, this Court should be aware
26 that in July of 2010, the defendant offered to settle the aforementioned civil litigation related to
his fraudulent scheme for $10,000,000. Defense Exhibit A at 28-29. Thus, he has either hidden
27 at least $10,000,000 from his schemes or else he was lying, as usual, and never intended to settle
the litigation, but was simply prolonging the process to suit his agenda and costing everyone
28 involved more money and time.

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1 been subject to recording.2 In those recorded calls, the defendant has made many statements
2 indicating that he has multiple connections in Israel and Russia, he is obsessed with getting out
3 of custody, and he has significant hidden assets to access if he is released.
4 On August 14, 2010, the defendant called Yossi (phonetic) in Israel. During that
5 conversation, the defendant discussed money with Yossi and Yossi advised the defendant that
6 “Zer (phonetic) transferred 70 and he’s going to transfer another 55 in the next few days. Yossi
7 says that the quarter of a million was transferred.” The defendant told Yossi that he [the
8 defendant] had money for his civil proceedings but that he does not have any for his criminal
9 proceedings.3 The defendant also repeatedly makes statements about needing to make bail. For
10 example, he stated that they need a really good lawyer so “they can get bail.” While discussing
11 money, Yossi told the defendant that he [Yossi] would feel more confident if he “had the deed of
12 the [unintelligible] in his hand” and then the defendant instructed Yossi “not to talk about that on
13 the phone.” The defendant told Yossi to contact people in Israel and a Russian Rabbi to make
14 efforts to obtain money. Yossi suggested someone from Africa, whose name Yossi could not
15 remember. The defendant commented that the Rabbi can make it happen because he has
16 “connections.” The defendant also told Yossi to advise the Rabbi that “they froze all the assets.”
17 Also on August 14, 2010, the defendant spoke to his ex wife, Yael, and asked her
18 whether they could “talk to people from the market from which it is hard to obtain financing.”
19 The defendant told Yael he was “willing to give all his assets away in exchange for his
20 freedom.” The defendant spoke to Yael about friends in Russia who could help them obtain
21 money and that Yael could transfer a “premium” to them. The defendant instructed Yael to “say
22
23 2
The calls are mostly in Hebrew and have been translated to English by the FBI.
24
3
This is significant because it is another lie by the defendant. Although the defendant
25 apparently tells Yossi that he paid for his civil proceedings, documents filed in the civil
26 proceedings belie that claim. Specifically, the defendant’s last counsel, i.e. Skadden Arps, filed
a motion to withdraw on or about August 31, 2010. The basis for Skadden’s motion was that the
27 defendant failed to pay Skadden’s fees. The defendant paid Skadden for less than 10% of the
work Skadden performed and, as of the date of Skadden’s motion to withdraw, owed Skadden
28 for more than 3,000 attorney work hours and 1,100 litigation support staff work hours.

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1 that we have assets in order to do it quickly” and he says he can’t “liquidate his assets quickly at
2 the moment.”
3 On August 15, 2010, the defendant spoke with Rabbi Sasha (phonetic) in Israel. Again,
4 the conversation centered on obtaining money and the defendant told the Rabbi that “he has
5 enough assets but he has to get out of here.” The defendant inquired whether the Rabbi knew
6 anyone in the “alternative market” who could assist and he said he needed “at least one or two
7 million dollars, including the bail.” The defendant referred to his connections on the outside
8 who could give a “pledge in order to try to take care of it right away.” The defendant stated to
9 the Rabbi that he “has to get out of jail.”
10 Also on August 15, 2010, the defendant called Yossi again. They discussed the
11 defendant’s need for money and possible sources in Israel and the defendant referred to someone
12 helping him as “the fat one.” Yossi advised the defendant that “seven round [70?] will be
13 transferred tomorrow and another 55 in a day or two.” The defendant stated that he “has to get
14 out . . . [and] . . . once he get (sic) out he will set everything straight with her and he will free it.”
15 The defendant also referred to having a huge “pledge.”
16 On August 16, 2010, the defendant called Yossi again. Yossi updated the defendant by
17 telling him that the “70 went through and 55 will in a day or two.” The defendant makes
18 reference to the “fat one” again and discusses efforts that the “fat one” is making to assist the
19 defendant. Yossi told the defendant that the defendant “has the quarter of a million that he
20 transferred, which is the last of his money.” The defendant commented that he “can’t touch that”
21 and when Yossi asked why, the defendant said “Yossi knows what they need it for [and] he
22 doesn’t want to talk about it over the phone.” The defendant also instructed Yossi to go to Rabbi
23 Sasha and tell him to “put it together at any price” and that “they have assets that they can give
24 him, if needed.” The defendant went on to tell Yossi to tell the Rabbi that “his assets were all
25 frozen . . . there is still time to free up assets in order to give him what he needs . . . it won’t be a
26 problem.”
27 On August 24, 2010, the defendant was in Oklahoma on his way to the NDCA and he
28 called Yossi again to discuss money and his custody status. The defendant instructed Yossi not

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1 to transfer money for him to Switzerland anymore and the defendant was pleased that the “55"
2 had not yet been transferred there. The defendant claimed that the government “caused a hold up
3 in Switzerland so they can’t do anything there right now.” The defendant repeatedly makes
4 statements indicating that he is desperate to get out of prison and he states that “once he gets out
5 everything is over.” When Yossi commented that Yossi did not see the defendant getting out,
6 the defendant said “it’s a lot easier to get bail in San Francisco . . . it’s not like LA.” Yossi asked
7 why an account was frozen and the defendant stated it was due to a government order in
8 Switzerland, but that it might be released in 30 days and that he has a lawyer there (Switzerland)
9 to take care of everything. The defendant claimed he could not do anything “so long as he is
10 inside.” Yossi expressed concern about a “guarantee” and the defendant assured Yossi “he has
11 nothing to worry about . . . the minute he gets out, it’s all over.” The defendant also said they
12 “have the Switzerland money . . . as soon as that is released, they will have liquidity.” The
13 defendant vaguely referred to having something that he could “execute” and that he had already
14 had someone “who can take it immediately.” When Yossi expressed concern about the
15 authorities being able to “get their hands on it” the defendant assured Yossi that they can not.
16 Thus, by the defendant’s own words, he has hidden assets that he will access upon his
17 release. He also states that “the minute he gets out, it’s all over.” The only reasonable
18 interpretation of this comment is that the defendant has no intention of defending the charges but
19 simply leaving them behind. He is 52 and facing decades in jail and millions of dollars in
20 restitution – there is simply no incentive for him to stay and live that future, especially in light of
21 the lifestyle he is used to. These conversations alone constitute a preponderance of evidence that
22 the defendant poses a flight risk and they justify detention. Taken together with the remaining
23 evidence, detention becomes the only reasonable conclusion.
24 D. The Defendant’s Proposed Bail Packages
25 When the defendant sought release before Judge Nagle, he offered the following as bail:
26 (1) $250,000 cash from the defendant; (2) $25,000 in cash from Bill Baulson; and (3) Roger and
27 Judith McAulay’s home in Poway, CA. Now, the defendant’s own money is off the table, Mr.
28

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1 Baulson apparently came to his senses, and the defendant offers only the McAulays’ home.4 The
2 new bail package is an absolute non-starter.
3 Likewise, Mr. Sandel’s offer to allow the defendant to live with him does nothing to
4 assure the defendant’s appearance. The defendant’s flight from this Court’s jurisdiction would
5 have absolutely no consequence upon Mr. Sandel, unless he were complicit in that flight.
6 Further, Mr. Sandel’s generosity must be viewed as that of someone who admits he has known
7 the defendant only “for a short period of time” and that he is “not involved in any business
8 relationship” with the defendant and has “no personal knowledge of the facts” underlying the
9 indictment.
10 The defense continues to refuse to address Judge Nagle’s concern about what he did with
11 the millions of dollars he stole. At the time of his arrest the defendant was living in a mansion in
12 Beverly Hills with a rental payment of approximately $50,000 per month.5 His wife drove a
13 Jaguar and he was chauffeured around in a Bentley. He employed body guards, a cook, and
14 several other staff at his mansion. Nevertheless, he expects this Court to believe that upon being
15 arrested he instantly and inexplicably became penniless. The defendant has a track record of
16 stealing huge sums of money from absolutely anyone, including taking his elderly father-in-
17 law’s entire life savings. Thus, having a third party, i.e. his unrelated business partner, put up his
18 home is meaningless and offers no assurance at all that the defendant will remain to face the
19 charges.
20 III. There Are Several Misrepresentations In The Defendant’s Motion
21 A. The Defendant Has Never Cooperated With The Government
22
4
23 In the event the Court entertains such an offer, the government will respectfully
request that the Court conduct the statutorily required inquiry into the source of the funds used to
24 purchase the home. 18 U.S.C. § 3142(g)(4) (court shall conduct inquiry into source of bail
money to establish not proceeds of fraud). Mr. McAulay has been the defendant’s business
25
partner for many years, including at Ecast, and the Court should make sure that none of the
26 proceeds used to purchase his home originated from the victims of the defendant’s scheme.
5
27 Agents interviewed a representative of the owners of the mansion and were advised
that the defendant told them he needed to rent their mansion because he was remodeling his own
28 mansion in Beverley Hills. Yet another lie by the defendant.

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1 The defendant claims he offered to cooperate with the United States Attorney’s Office
2 and that he cooperated with the Securities and Exchange Commission (“SEC”) in its separate
3 investigation into the defendant’s activities. Both claims are false.
4 First, with respect to this office, and as set forth at the detention hearing, the defendant’s
5 previous attorneys contacted law enforcement and this office in an attempt to obtain information
6 about whether the defendant was begin investigated. Those attorneys never offered any
7 statement or evidence from the defendant nor did anyone ever offer to have the defendant self-
8 surrender in the event of an indictment. Defense Exhibit A at 30-31. Calling the U.S.
9 Attorney’s Office to fish for information on behalf of your client does not constitute cooperation.
10 The defendant claims he was well aware that law enforcement officers were looking for him at
11 his mediation in San Francisco in July 2010, but that he did not thereafter flee. However, the
12 defense had (and still has) no response to the government’s point at the detention hearing that if
13 the defendant truly wanted to cooperate he wold have presented himself to the agents who were
14 looking for him at his July 2010 mediation in San Francisco. Id., at 30. Instead, he refused to
15 appear at the mediation in person and hid in his attorney’s office.
16 Second, with respect to the SEC, while the defendant produced documents and provided
17 testimony to the SEC, that is far different from cooperating with a criminal investigation. More
18 importantly, the evidence shows that the defendant produced fraudulent documents to the SEC
19 and lied throughout his SEC testimony. Those are not the actions of a person cooperating with
20 the SEC. Specifically, the declaration and release agreements relied on by the defense were
21 procured by fraud. Defense Motion Exhibits B and C. Mr. Dillon’s name is misspelled on his
22 declaration. Mr. Glover has stated that he did not knowingly sign the release. He said the
23 signature looks legitimate, but that he trusted the defendant and sometimes signed documents at
24 the defendant’s urging without reading them. This explanation is far more credible than the
25 defendant’s, because it simply makes no sense for Messrs. Dillon and Glover to have executed
26 releases for $30,000 each after investing millions with the defendant. Further, there are multiple
27 witnesses in addition to Mr. Dillon who have stated that the defendant personally told them
28 about the fake Microsoft/Ecast deal. There are also multiple email communications between Mr.

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1 Dillon and the defendant wherein Mr. Dillon refers to Microsoft and the defendant never corrects
2 Dillon or indicates in any way that he does not understand what Dillon was referring to. As for
3 false testimony, examples of false statements to the SEC are the following: the defendant
4 testified that he never sold Ecast shares after leaving Ecast in October of 2002 and he testified
5 that he never told anyone Microsoft was going to acquire Ecast.
6 The defendant’s use of termination letter from the SEC is a red herring. As this Court is
7 well aware, government agencies decline to take action on matters for myriad reasons, many of
8 which do not necessarily reflect the agency’s position regarding the merits of the claims being
9 investigated. Indeed, the SEC Enforcement Manual specifically cautions against drawing such
10 conclusions based on a termination letter:
11 The termination letter should be signed by staff at the Assistant Director level or above
and a copy of the Commission's Wells Release (Securities Act Release No. 5310), which
12 authorized termination notices, should be attached to each termination letter. As noted in
the Commission’s Wells Release, the provision of a termination notice “must in no
13 way be construed as indicating that the party has been exonerated or that no action
may ultimately result from the staff's investigation of that particular matter. All that such
14 a communication means is that the staff has completed its investigation and that at that
time no enforcement action has been recommended to the Commission. SEC
15 Enforcement Manual, page 40, Section 2.6.2 (emphasis added).
16 In light of the overwhelming evidence of the defendant’s fraud, this Court should disregard the
17 SEC’s letter to the defendant as it sheds no light on the detention issues.
18 B. Many Statements in the Motion are False and Others are Irrelevant
19 The defendant’s arguments regarding his father-in-law and Mr. Burillo have been
20 unequivocally contradicted by those witnesses, as well as the defendant’s brother-in-law. FBI
21 and IRS agents have interviewed Robert Stripling (the defendant’s father-in-law), Stephen
22 Stripling (the defendant’s brother-in-law) and Javier Burillo.
23 Robert Stripling has confirmed that he sent millions of dollars to the defendant to
24 purchase Ecast stock, and thereafter, to pay for costs associated with EU approval of Microsoft’s
25 takeover of Ecast (as represented to him by the defendant). Stephen Stripling invested with his
26 father and corroborates his statements that he made the investment with the defendant based on
27 misrepresentations that Ecast was going to be acquired by Microsoft and that money was needed
28 to cover fees associated with EU approval of the transaction. By the defendant’s own admission,

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1 he sold Robert Stripling 134,000 shares of Ecast for $400,000 in January of 2003. The defendant
2 was only able to sell Dr. Stripling Ecast shares at $3 each at a time when the defendant knew
3 they were worth less than 10 cents each by lying to Dr. Stripling and telling him that Microsoft
4 was going to acquire Ecast.
5 Mr. Stripling (and the victims underlying the indictment are corroborated by even more
6 victims who have sued the defendant for making false statements in connection with selling
7 Ecast stock). In December of 2003, Michael Farrell and others sued the defendant (Michael
8 Farrell, et al. V. Samuel Cohen, et al., San Francisco Superior Court, Case # 03-422354) for,
9 among other causes of action, defrauding the plaintiffs in connection with the sale of Ecast
10 shares. Specifically, the plaintiffs alleged that Cohen made numerous misrepresentations that
11 Ecast was about to be acquired by such companies as Microsoft, Cisco, Qwest, and others. In
12 February of 2004, Roger Ashkenazi sued the defendant (Ashkenazi v. Cohen, et al., San
13 Francisco Superior Court, Case # 04-429059) for, among other causes of action, defrauding the
14 plaintiff in connection with the sale of Ecast shares. Specifically, Ashkenazi had a stock
15 purchase agreement with the defendant dated June 13, 2002, wherein the defendant claimed to
16 own 5,000,000 shares of Ecast and sold them to Ashkenazi for $1,040,000. Among the many
17 misrepresentations alleged by Mr. Ashkenazi was that the defendant told him that Ecast was on
18 the verge of going public.
19 Like the Striplings, Mr. Burillo has advised the FBI and IRS that he paid several million
20 dollars to the defendant for numerous investments (unrelated to Ecast) and that the defendant has
21 failed to return a single dollar to him. Mr. Burillo has provided documentation of his
22 investments with the defendant and the IRS has traced more than $3,000,000 of those
23 investments going to the defendant’s personal expenses instead of the investments as represented
24 to Mr. Burillo. The phone calls preceding the defendant’s arrest involved the defendant lying to
25 Mr. Burillo – as he had on so many previous occasions – that he (the defendant) was just about
26 to pay Mr. Burillo back. The defendant also lied to Mr. Burillo about being in Europe at the time
27 of his last call with Mr. Burillo shortly before his arrest. Mr. Burillo states that the only reason
28 he maintained seemingly amicable contact with the defendant was because he hoped to recover

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1 some of the millions the defendant stole from him.

2 The defendant’s letters of support are irrelevant with respect to the issues of whether he
3 poses a flight risk or danger to the community. Frankly, they are from people who either do not
4 know him that well, know nothing about his fraud, are related to him, or who depend upon him
5 for financial support. For example, approximately $20,000,000 of the money stolen by the
6 defendant in this case passed through the defendant’s wife’s bank accounts and she financed the
7 publication of her book, Stacy Cohen, The Kosher Billionaire’s Secret Recipe, Atria Books
8 (2007), with money the defendant stole from the victims. It is telling that she fails to corroborate
9 the defendant’s claim that the money he stole from her father was really just Robert Stripling’s
10 way of giving money to his daughter. None of the people who wrote the letters are willing to
11 risk a dime for the defendant.
12 The defendant claims to be involved with a variety of legitimate companies. However,
13 what is missing from the defendant’s claims is an explanation about where his income has come
14 from over the last decade. There is no evidence that any of the defendant’s ideas/companies
15 have actually generated any income for him – and if they have, the defendant has failed to pay
16 tax on that income. The government’s references at the detention hearing and to this Court relate
17 to the fact that the government is unaware of the defendant earning any actual income by a
18 legitimate means over the last decade. To the contrary, the evidence is that he defrauded the
19 victims underlying the indictment, his in-laws, and Mr. Burillo of approximately $40,000,000,
20 and lived an obscenely lavish lifestyle on their life savings.
21 IV. The Defendant Is Properly Detained And The Motion Should Be Denied
22 The government has shown, well beyond a preponderance, that the defendant poses a
23 significant risk of flight if released. There is irrefutable evidence that he has sent millions of
24 dollars to Swiss bank accounts. The defendant stole more than $40,000,000 from various
25 victims beginning in 2002 and it is reasonable to infer that he has secreted money beyond the
26 government’s reach. Indeed, in his calls from prison has repeatedly referred to having assets that
27 he will access upon his release and that this will “all be over” once he is released. It will be over
28 for him because he will flee. He has Israeli citizenship and significant contacts in Israel and

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1 apparently elsewhere as well. In similar situations, wealthy defendants charged with financial
2 fraud, who had access to assets abroad and international connections, and who were facing
3 lengthy sentences, have been ordered detained. See United States v. Stanford, 630 F.Supp.2d
4 751 (S.D. Tex 2009); United States v. Gentry, 455 F.Supp.2d 1018, 1033 (D. Ariz. 2006)
5 (Gentry presents as an intelligent, talented man with dramatically diverse personalities: (1) a
6 bright, exemplary side-a man whose family, close friends and church members truly believe he is
7 an honest, spiritual, and law-abiding pillar of our community; and (2) a dark side-a man whose
8 greed, avarice and imagination to deceive is seemingly limitless). As in Stanford and Gentry,
9 neither the absence of a criminal record nor the support of people with clear bias (or lack of
10 knowledge regarding the defendant) is not determinative. The issue is whether there is sufficient
11 evidence that the defendant will flee if released and the answer to that inquiry in this situation is
12 definitively affirmative.
13 The defendant is also a danger to the community. As far as the government can tell, the
14 defendant has made his living over the last decade entirely on various fraudulent schemes
15 whereby he has stolen millions of dollars from friends, relatives and strangers. The defendant
16 offers no evidence that any of his alleged legitimate business ventures generate any income.
17 Nevertheless, prior to his arrest the defendant lived an extravagant and expensive lifestyle. He
18 therefore is either financing it with proceeds of his past fraudulent schemes or perpetrating new
19 ones. He is a con man, plain and simple, and therefore a danger to society. See United States v.
20 Reynolds, 956 F.2d 192 (9th Cir. 1992) (danger to community may include potential economic or
21 pecuniary harm in context of whether to grant bail pending appeal); see also United States v.
22 Madoff, 316 Fed. Appx. 58 (2d Cir. 2009) (unpublished) (affirming district court’s denial of
23 pretrial bail; citing and quoting Reynolds)
24 ///
25 ///
26 ///
27 ///
28 ///

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1 V. Conclusion
2 Judge Nagle’s Order of August 12, 2010, was based on strong and abundant evidence
3 that the defendant is a flight risk and a danger to society. Since then, the evidence in support of
4 detention has only strengthened considerably. Accordingly, the government respectfully request
5 that this Court deny the defendant’s motion to vacate Judge Nagle’s Order.
6
7 DATED: October 13, 2010 Respectfully submitted,
8 MELINDA HAAG
United States Attorney
9
/S/
10 ________________________________
JEFFREY R. FINIGAN
11 Assistant United States Attorney
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