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Judge dismisses civil RICO claims against Steven Cohen

Washington residents may have heard that one component of a lawsuit filed by Patricia Cohen against her husband Steven Cohen, founder of SAC Capital, was recently dismissed by a district court judge in New York. However, fraud charges brought by Ms. Cohen against her former husband were allowed to continue. Part of her original complaint dealt with civil RICO charges, which were eventually dismissed by the judge hearing the case. The fraud charges are tied to her belief that Mr. Cohen knowingly hid money that he received due to an apartment investment deal from her.

According to a report, Mr. Cohen allegedly led his former wife to believe that an investment, which totaled $8.7 billion, was lost. The investment was concerned with conversions of an apartment located in New York in the 1980s. However, after the couple finalized their divorce in 1990, Ms. Cohen learned that her former husband had received a $5.5 million settlement from the investment, which he reportedly failed to disclose during the divorce proceedings. The judge hearing the case allowed the fraud claim to move forward because the woman may have reasonable relied on the statement suggesting the investment had been lost.

The case continues in the wake of insider-trading charges levied by the United States Justice Department. The report says that SAC Capital was held liable for $1.2 billion in penalties after it entered a guilty plea. Mr. Cohen was not charged in the lawsuit, but a source suggests that Mr. Cohen may be personally targeted by the department in future.

As in this case, couples involved in high-asset divorce may face a number disputes. In addition to assets gained in business and investments, other contentious issues might include the division of jointly held debt and pensions. In order to pursue an equitable agreement, individuals involved in contentious separations may work choose to work with a lawyer.

Source: USA Today, "Steven Cohen divorce battle continues", Kevin McCoy, January 27, 2014

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