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Former SEC employee pleads guilty to theft of government property

A former employee of the Securities and Exchange Commission’s enforcement division pleaded guilty Tuesday to theft of government property in federal court in Central Islip, ending what probably would have been the first federal criminal trial on Long Island since March because of the coronavirus pandemic.

Michael Cohn, 61, of Norwalk, Connecticut, had been charged in 2019 with a number of felonies for passing on confidential SEC information to get a job with a Manhattan-based investment firm that was under investigation by the regulatory agency. The firm, GPB Capital Holdings, had a Garden City office, and a number of investors were from Long Island, allowing the case to be prosecuted in Central Islip, according to federal prosecutors.

The prosecutors had charged Cohn with obstruction of justice, unauthorized computer access and unauthorized disclosure of confidential information. But prosecutors objected when Cohn’s attorneys wanted a trial as soon as possible, and U.S. District Court Judge Gary Brown agreed to hold a bench trial — without a jury — most likely in September.  

Brown’s decision set the stage for the likelihood of the first federal criminal trial on Long Island in seven months.

Brown in a ruling last week said he agreed with defense attorneys that “delaying the trial until the end of October increases the risk that the coming flu season combined with a resurgence of the COVID-19 pandemic will curtail the district’s ability to hold any trials.”

Brown also had said last week that ways to overcome “the logistical issues raised by the government” would be discussed at a status conference scheduled for this Tuesday. The issues included the necessity to call a dozen witnesses from a number of states in the face of travel and quarantine restrictions.

But over the weekend, the government agreed to drop the felony charges in return for a misdemeanor plea.

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In a brief statement along with his plea, Cohn said that he had “accessed confidential information” from the SEC files in advance of his job interview.

Cohn faces up to six months in prison under the terms of the plea deal.

Cohn’s lead defense attorney, Scott Resnik, said after the hearing that the plea agreement “vindicated” his client’s contention that he had not committed any felonies but had used the information as background to prepare for a job interview with the firm.

Nancy Sterling, a spokeswoman for GPB, said in a statement: “Former SEC and GPB employee Michael Cohn was with GPB for less than a year and GPB had no involvement with or knowledge of his wrongdoing. GPB terminated Cohn immediately upon learning of the situation.” 

A spokesman for the U.S. attorney’s office, John Marzulli, declined to comment.

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