Posted: Aug. 14, 2015
"DOWN A VERY DARK PATH"
By Celia Cohen
Federal agents were looking for evidence of an elaborate fraud scheme, involving multi-millions of dollars, when they closed in on Jeffrey Brian Cohen, an insurance executive gone rogue.
What they found was a lot more than phony bank statements and forged signatures.
It was June 25, 2014, when federal agents arrested Cohen, a onetime bouncer who parlayed that experience into a lucrative undertaking called Indemnity Insurance, marketing policies to an offbeat clientele of nightclubs, bars, adult entertainment establishments and music tours.
Cohen operated Indemnity out of Maryland, but it was regulated in Delaware, and lawyers for the Insurance Department here were the ones who went to federal authorities based in Maryland with suspicions that he was running not so much a business but a giant scam.
What the federal agents turned up as they searched for evidence was chilling, as they spelled out in legal documents and testimony in a court transcript.
A $25,000 Tracking Point "smart rifle" with so much technology built into it, a novice can hit a target up to 1,000 yards away. Bomb-making materials. Masks, wigs, a false mustache and five pairs of gloves. Knives. A new will, executed two days before the arrest.
A purple notebook with a "target list" and what possibly was a reference to July 4, 2014, just nine days away, and an audio recorder on which Cohen is heard to say, "Society needs to look at the fact that killing isn't wrong in certain circumstances, and killing culls the weak."
Also directions to the home of Matt Denn, the Democratic attorney general who was the lieutenant governor at the time and had also been the insurance commissioner.
Also directions to the home of Travis Laster, a vice chancellor who presided over proceedings brought by the Insurance Department against Indemnity in the Court of Chancery.
The feds locked up Cohen. He still is, and they want to keep him that way. They have asked a judge to sentence him to 40 years.
Cohen, now 40 years old, pleaded guilty four days into a trial in early June in Baltimore to charges of wire fraud, aggravated identity theft, making false statements to an insurance regulator and obstruction of justice, according to the U.S. Attorney's Office in Maryland.
He was supposed to be sentenced on Aug. 4, but instead he is trying to withdraw his guilty plea, and a hearing about it is scheduled before Judge William Quarles Jr. on Sept. 8.
"The defendant went down a very dark path," federal prosecutors said.
"The government submits that only the happenstance of the federal indictment, arrest warrant for the defendant and execution of the home search warrant, all occurring on June 25, 2014, interrupted the defendant before he could attack public officials for performing their official duties."
Cohen, who is representing himself, has countered in his own court filings that prosecutors "jumped to conclusions" and "created whimsical theories."
As a court transcript shows him saying at his trial, "The government's allegations that I wanted to physically harm people are just preposterous. It just, it lacks common sense."
Before Cohen was arrested, federal prosecutors say he was running an enterprise with nearly 100 employees and 3,000 policyholders who paid more than $100 million in premiums, all while faking solvency and paying claims, Ponzi scheme-like, out of the premium cash flow, as well as compensating himself with $9 million in pay and perks from 2008 to 2013.
He had houses in Maryland and Florida. He took private jets to fly between them. He had the use of an array of luxury cars, including a Porsche, Lexus, Bentley and Range Rover, and a license plate reading, "RISKTKR."
By 2014, Cohen was out at Indemnity after regulatory actions and court rulings went against him. He accused the Insurance Department of turning a "baseless claim of insolvency" into reality by running his business into the ground "through catastrophic mismanagement," and prosecutors say he decided to go after Laster and Denn.
Why Denn was targeted appears to be something of a stretch, because Denn was gone and Karen Weldin Stewart was the Democratic insurance commissioner when Indemnity was investigated. Prosecutors theorize Cohen blamed Denn as the commissioner who set up the enforcement mechanisms and retained consultants leading to his downfall.
There was also a bizarre connection to politics. Denn was running as the Democrats' candidate for attorney general, and the Republicans were going with Ted Kittila, who had been Cohen's lawyer in the Court of Chancery, although he no longer represented him.
In filings and testimony, prosecutors described what they uncovered Cohen did in June 2014.
He purchased the Tracking Point rifle. He shaved his head. He went to the Internet to create a domain called Y-I-DID-IT.com and research bomb making. He bought bolt cutters, disposable handcuffs and night-vision binoculars. He took target practice at a shooting range.
He arranged to cash in a life insurance policy for $250,000. He made a will. He plotted out directions to the houses of Denn and Laster.
He traveled to Delaware on June 20, 2014, five days before his arrest. He recorded himself talking about what he called a "recon" trip and musing about killing to cull the weak, and he made notes about a house for sale on Denn's street as a place that might be useful for "scouting."
Cohen had innocent explanations for what he did, down to and including his hair, as he discussed in court documents and testimony.
"A man dealing with middle-aged baldness and wanting to trim his hair short is not a sign of being threatening," he said.
That ultra-high-tech rifle was for a "dream-of-a-lifetime" hunting safari in Africa.
The suspicious tools and materials were stuff he was using for his hobby of making guitars and a project for building a hydro generator to use water as fuel for running a car, not for bombs.
The masks and wigs and so forth were there because he was planning a masquerade ball for the grand opening of a retail store he owned.
The sinister-sounding threats from the purple notebook and the audio recorder were taken out of context from his ideas for creative writing topics and movie scripts. "I enjoy writing," he said in court.
He needed Laster's address not to harm him, but to serve him with court papers, and Denn's to do him only political mischief.
"Matthew Denn has been surrounded by a cloud of corruption for a long time. He decided he was going to run for attorney general of Delaware. One of my attorneys in Delaware was also running for attorney general. He asked me to support him," Cohen said during his trial.
"I said, okay, I'll give you some funding, I'll come up with possibly some political attack ads for you, because I know the dirt on Matt Denn. I drove to Matt Denn's house, and I took photos of his house, because the plan was to use this in a political attack ad."
The federal authorities were hardly persuaded. They pronounced Cohen dangerous and declared, "His punishment must be decades long."
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Only unfortunate coincidence gave the same last name to Jeffrey Brian Cohen and the writer.