Austin v. Cohen

602 S.E.2d 146, 268 Ga. App. 650, 2004 Fulton County D. Rep. 2233, 2004 Ga. App. LEXIS 877
CourtCourt of Appeals of Georgia
DecidedJune 29, 2004
DocketA04A0202
StatusPublished
Cited by8 cases

This text of 602 S.E.2d 146 (Austin v. Cohen) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Austin v. Cohen, 602 S.E.2d 146, 268 Ga. App. 650, 2004 Fulton County D. Rep. 2233, 2004 Ga. App. LEXIS 877 (Ga. Ct. App. 2004).

Opinion

Miller, Judge.

William ft. Austin, Edward J. Herrman, and Ivan Kerr brought a civil action against Ronnie Cohen under the Georgia Racketeer Influenced and Corrupt Organizations (RICO) Act, OCGA§ 16-14-1 et seq., claiming to be “persons injured” and “aggrieved persons” as defined under the RICO Act. They asserted that their RICO action was “supplemental to any other civil or criminal remedy.” In their complaint, Austin, Herrman, and Kerr alleged that Cohen had participated in at least 38 prohibited activities involving them and others and that through “an advanced fee loan money-laundering enterprise,” had damaged them by acquiring their “money, services, and property.” Following a jury trial in which Austin and his co-plaintiffs prevailed, the trial court granted a judgment notwithstanding the verdict (j.n.o.v.) in favor of Cohen, reasoning that the plaintiffs’ claims were barred by res judicata and collateral estoppel. Austin, Herrman, and Kerr appeal from this ruling. For the reasons that follow, we are constrained to affirm.

It is undisputed that as a result of a federal investigation into an elaborate scheme to defraud, a federal grand jury indicted Cohen for conspiracy to launder proceeds, resulting in Cohen’s arrest in 1999. Based upon a “cooperation agreement which required him to give testimony,” Cohen was permitted to enter a guilty plea to conspiracy to commit wire fraud. See In the Matter of Cohen, 271 Ga. 584 (522 SE2d 456) (1999). In June 2000, Cohen testified as a government witness in a federal trial in Gainesville, Florida.

In 1999 and 2000, Austin, Herrman, and Kerr individually filed separate lawsuits against Cohen, and thereafter lost on summary judgment. Herrman sued Cohen for fraud, conversion, and to set aside contract. In Herrman v. Cohen, 252 Ga. App. 84 (555 SE2d 17) (2001), this Court affirmed summary judgment because of the lack of evidentiary support for Herrman’s claims. Id. at 85 (2). Austin also filed an action to set aside contract and sued Cohen for fraud and [651]*651conversion stemming from a fraudulent investment scheme. In Austin v. Cohen, 251 Ga. App. 548 (554 SE2d 312) (2001), we affirmed summary judgment to Cohen because Austin failed to present specific argument, case law, and record citations to support his contention that material issues of fact remained for resolution. Id. Kerr likewise sued Cohen for fraud, conversion, and to set aside contract. In Kerr v. Cohen, 249 Ga. App. 392 (548 SE2d 17) (2001), this Court affirmed summary judgment, finding, in particular, that Kerr failed to present evidence to show justifiable reliance on Cohen’s representations. Id. at 396 (1) (b).

At the time of the financial transactions involving Austin, Herr-man, and Kerr, Cohen was an attorney licensed in Georgia to whom they entrusted substantial funds when they wired the funds at his instruction. As such, Cohen occupied a confidential and fiduciary relationship that he apparently breached.

The record shows that on summary judgment in each case, Cohen submitted his own testimony, an affidavit virtually identical in substance and content. In these affidavits, Cohen repeatedly denied entering into any business dealings, having any discussions, including by telephone, “prior to the alleged business transaction.” On summary judgment Cohen may have submitted perjured testimony. In the Kerr case for example, Cohen testified that he “never engaged in any negotiations with Mr. Kerr,” and “never spoke with Mr. Kerr prior to, or during the time he alleges he was harmed.” However, the record clearly reveals that Cohen had business dealings with Herr-man and Kerr, particularly in providing explicit instructions to them as to how and where to wire the funds, and that Cohen dealt indirectly with Austin.

The RICO case here proceeded to a jury.1 A Federal Bureau of Investigation (FBI) special agent testified in considerable detail about Cohen’s participation in a fraudulent investment and money laundering scheme in which he represented himself as the escrow agent acting for a bank in Antigua. The agent testified without contradiction that “Mr. Cohen admitted to being involved in wire fraud, mail fraud, and the subsequent laundering —.” He also testified that Cohen had “entered a plea of guilty for participation in a money laundering conspiracy.” The agent described Cohen’s role as escrow attorney “for Venture Capital Syndication deals or transactions that Phoenix Investment Group engaged in.” The FBI agent confirmed Cohen’s admissions:

[652]*652that he had been involved with a group of other individuals who were involved in committing wire fraud and mail fraud, and that during his tenure as Escrow Attorney for the group, and later for the bank at Antigua, Caribbean American Bank, that ofthe 38 clients that were contacted through the office he maintained in Coolidge, Georgia, including the Plaintiffs here, none were provided with venture capital per their requests and that all 38 lost the fees which they had provided to the group.

The agent confirmed that Cohen acknowledged committing crimes through his office in Coolidge, and admitted that Austin, Herrman, andKerrwere among the 38 victims ofthe wire fraud and mail fraud.2 The FBI agent, who had attended the federal criminal trial, provided testimony about parts of Cohen’s testimony from that trial in which Cohen testified as a government witness.

In addition to the FBI agent, Austin, Herrman, and Kerr also testified at trial, describing their investments and transactions with Cohen. Herrman and Kerr testified that Cohen had given them exact instructions on wiring their money to Chase Manhattan Bank in New York, the bank from which the funds were wired to a bank in the Caribbean. Herrman testified that before wiring the funds, he had his lawyers investigate the parties and Cohen’s law firm3 and had his certified public accountants examine the documents. Herrman also produced a letter from Cohen addressed to him in which Cohen represented himself as a member of the Georgia bar, acting on behalf of Caribbean American Bank. Herrman testified that, relying upon Cohen’s representations, he wired $880,000 to Chase Manhattan Bank. Herrman avowed that Cohen “is the one that gave us the instructions where to send the money....” Kerr testified that before wiring the money to Cohen, he had contacted the State Bar of Georgia to determine whether Cohen was an attorney in good standing. Kerr testified that when Cohen called him, Cohen “gave me several assurances that they’d closed a number of these transactions where the people actually received their money, but because of confidentiality, he wasn’t at liberty to give me that information.” Kerr testified that when he wired the money, he did so at Cohen’s instruction. Kerr also testified that at Cohen’s request, he had faxed a copy of a check to Cohen. Austin testified that while he had not met Cohen, “I relied [653]*653on Mr. Cohen as being an attorney with an escrow account that supposedly, used to be safe.”

After expressly finding the existence of four predicate acts as contemplated by RICO, the jury entered three substantial verdicts against Cohen. The verdicts, after being trebled under RICO, resulted in a judgment awarding $3,300,000 to Austin, $675,000 to Herrman, and $2,165,625 to Kerr. Thereafter, Cohen filed a motion for j.n.o.v. or alternatively, motion for new trial.

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Bluebook (online)
602 S.E.2d 146, 268 Ga. App. 650, 2004 Fulton County D. Rep. 2233, 2004 Ga. App. LEXIS 877, Counsel Stack Legal Research, https://law.counselstack.com/opinion/austin-v-cohen-gactapp-2004.