THE REMARKABLE JAY COHEN STORY
wrongful incarceration would make great movie script

by gary ilines
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The remarkable story of Jay Cohen's arrest and imprisonment in the United States in 2000 has all the necessary ingredients to make a great Hollywood conspiracy theory movie script. Innocent man denied true justice in court of law due to pressure brought to bear on federal government by major corporation because financial interests are seen to be under threat by said innocent man. The major difference, however, from a Hollywood movie script is that in the movie all the facts and motives are hidden up until our protagonist unveils the truth and the innocent man is acquitted. In the true life story of Jay Cohen, the facts are in the open from the start for everyone to see, but there is no protagonist and the innocent man has four years of freedom removed from his life.

Young Jewish millionaire living in Antigua and making even more millions taking online bets from US citizens perhaps doesn't exactly cut the most sympathetic character outline for our hero, it has to be said. It sounds extremely shady to say the least. Yet the most surprising thing about Jay Cohen is that his online business operation was not a shady operation at all and his career began in a very clean, all-American manner. In 1996, Jay Cohen was a UC Berkeley graduate working for Group One in San Francisco. It was a very lucrative position in options trading and the young man with a wife and young family was already making a financial success of his life. His idea for operating an online betting company came from the popularity amongst his colleagues at Group One for sports betting - sports futures they called them.

So what happened then? Did Jay Cohen quietly sell his assets, move them offshore, and sneak off to Antigua to join a group of mafia blood brothers? No, quite the opposite. From the very beginning, Cohen had no intention of breaking any laws or jeopardizing his rights as a US citizen which always meant more to him than money and, as we have seen, he was already a wealthy young man with a bright future working in San Francisco. His first step was to look for existing models of the type of operation he had in mind and he discovered that there was already a precedent for betting companies legally accepting bets from out-of-state customers in the form of New York Off-Track Betting Corporation. Furthermore, he discovered that Sports International, a publicly traded company that had Congress’s former majority whip on its Board of Directors, was already conducting a sports wagering business based offshore, as were a number of other companies. It was also clear that the US government does not per se disapprove of offshore companies accepting bets from US citizens, testified for example by the copious advertising by the UK's Sportsbet which can be seen each year at the Grand Prix Americas car race in Miami, and the friendly relationship between the management of Sportsbet and the mayors of Miami.

So the signs were encouraging for Cohen and thus he decided to take the first steps which were to hire the US law firm of Orrick, Herrington & Sutcliffe and the international consulting firm of KPMG. Not until all of Cohen's documents and applications were thoroughly examined and approved by these two firms did KPMG start negotiations with the government of Antigua - where online gambling is legal - and licenses were issued by the Antiguan government. Cohen then moved to Antigua, removing all assets from the United States as required by law, and in early 1997, he launched World Sports Exchange, wsex.com.

So that was the end of Jay Cohen's existence as a US citizen, right? Wrong again. In accordance with the law and advice he received from KPMG, all WSE operations and transactions took place entirely within the jurisdiction of Antigua, meaning that US gamblers had to have an account in Antigua first before money could be accepted. As far as Jay Cohen was concerned, he had nothing to fear from the US federal government and he filed all required reports to the government clearly stating his business, his income, and he paid all his required taxation. His business was featured in an article in the Wall Street Journal, he debated United States officials on national TV, and he paid frequent visits to his home in California.

In 1998, the purge began. Jay Cohen was only one of twenty-one men indicted for related misdemeanors. The reason his case is the most noteworthy is because, of the other twenty men indicted, seven did not return to US soil to face prosecution and the others pleaded guilty and were made to pay small fines. Cohen sincerely believed that he had broken no law and therefore he took the case to court, and would have won had the deck been fairly shuffled.

The first signs that there were opponents plotting his downfall came when, shortly after the favorable report in the Wall Street Journal, he received a letter from Debevoise & Plimpton, the New York law firm which represents the NFL, NBA, NHL, and Major League Baseball, threatening a law suit if their demands were not met. The demands were: removing their team names from the wsex.com site, taking down links to their official web sites, and ceasing business with US residents. In short, the demand was to quit doing business. Cohen sent a team of lawyers to meet with Debevoise & Plimpton and thought he had reached a settlement, although he was naive in this respect. At that time, he didn't fully understand who he was dealing with.

This is where our beautiful protagonist comes in to dig up the facts, but as mentioned above, the facts don't need digging up because they are already clear as day. Our movie takes place in the southern district of New York and the trial takes place in a New York District court with a Judge - Judge Griesa - from the southern district of New York. Jay Cohen himself is originally from New York. The proceedings were instigated against Jay Cohen by Debevoise and Plimpton and were based on bets placed on WSE by undercover FBI agents in New York. Cohen's business model was based on New York Off-Track Betting Corporation.

"After a little investigation it all became clear to me. You see, there is an incestuous relationship between the Southern District office and the Debevoise firm. Tom Rubin, the assistant US Attorney who brought this case had worked at the Debevoise firm from 1990 to 1994. Lorin Reisner, the Debevoise point person on this case worked in the Southern District office as a assistant US attorney from 1990-1994 (Exhibits 6 and 7, the Martindale-Hubbell on Rubin and Reisner). I found out that the Debevoise firm encourages their attorneys to go work for the Southern District for a few years, come back and still receive credit towards seniority for the time spent with the government. It’s a “revolving door.” So now it all made sense, I was being prosecuted by Debevoise at the request of the NFL, NBA, NHL, and Major League Baseball. "

Mr. Cohen's defense rested on three keystones. Cohen was accused of violating the Wire Act of 1961. Cohen's defense team invoked article § 1084(b) of this law which states that someone cannot be prosecuted for accepting a bet which occurs entirely within a jurisdiction where the action is legal, stateside or otherwise - in this case Antigua. The viewing of this section of the bill was denied the jury in this trial. Secondly, Cohen's defense team invoked the principle of lenity whereby in US law the defendant is given the benefit of any doubt caused by grey areas in legislation; if ever there was grey area in US legislation it's how the Wire Act applies to Internet betting. Judge Griesa strongly instructed the jury to ignore this principle with regards to the Cohen case. Thirdly, the Cohen defense invoked the Powell Doctrine, a legal precedent which suggests that a person must willingly and knowingly be breaking the law. The history of Cohen's painstaking attention to detail and the money he spent hiring professionals to ensure he did not breach the law, and his openness and honesty about his business and income to the federal government really leaves only two possibilities: either he believed he was within the US law, or he wanted to go to prison. Again, the jury were told to ignore this doctrine as irrelevant to the case.

In this movie script I am envisaging, I see the judge as a fascinating and likable character, prerferably black, someone drawn apart between the desire not to punish an innocent man, but a man with his arm tightly twisted behind his back by the powers above him. Perhaps before he goes into the courtroom he assumed that the man was guilty and that the jury would find him guilty and that his part in the affair would be minimal and irreproachable. Perhaps that was what he was told would be the scenario. Well, if that was the case, he was soon to be disillusioned after the powerful and convincing opening statement by the defense lawyer Ben Brafman, because as soon as Brafman sat down, Judge Griesa, in unprecedented fashion, then talked for twenty minutes and completely undermined the defense's position. Things didn't get any better thereafter. As mentioned above, the jury were explicitly informed to ignore the three cornerstones of the defense position, and at the end of the trial the jury were told by the judge to ignore in its entirety Cohen's testimony as irrelevant. Then, in a dramatic final twist, the jury returned to ask the judge to let them have Cohen's testimony and after much deliberation the jury were handed a highly edited version of his testimony. In short, the jury were given nothing admissible with which to acquit the defendant and therefore given no choice but to return a guilty verdict, which they had to and did.

Then, after all this bias and unfairness, the judge hands down the minimum possible sentence. Jay Cohen could have been facing 19 years in prison and a $250,000 fine. Instead he was given 21 months with 15% off for good behavior and a fine of just $5000. And then, in the final action of the courtroom part of our film, the prosecution move to deny bail and Judge Griesa tells them to sit down and shut up. In the final action of the movie, we see Jay Cohen after his release living in comfort and luxury with his family in his beloved homeland of the United States (hot dogs in the garden on Independence Day, or something similar), and finally the judge sitting in his office like it's a jail cell, with a sad and resigned expression on his face.

After the first trial, Cohen's defense lawyers tried to put the case through second circuit courts, and appealed to the supreme court. The Supreme Court would not hear the appeal although they did force a statement out of the government. All this, though, was finally to no effect and the prison sentence began in 2002. Jay Cohen is due for release this year (2004) and then he will be under monitored release for two more years to come. From the time he was first indicted to the end of his two years of monitored release will total eight years. That is almost the entirety of the man's thirties, the time when most men are establishing their career and their family and their home. One would therefore expect the next two supervised years of his life to be quiet and uneventful, getting to know his family again, and making up for lost time.

That's not great material for a sequel, although I'm sure there are plenty of magazines who will be buying up his story.