Cohen Loses Appea

1 August 2001
A federal court on Tuesday turned down Internet bookmaker Jay Cohen's appeal of his conviction for violating the federal Wire Act. The decision rocked the Net betting industry, which had been watching the case closely.

"Jay was extremely disappointed, to put it mildly," said Melinda Sarafa, an attorney with Brafman & Ross, the firm representing Cohen. "I think it came as a shock, because our arguments, we believe, are quite compelling. We believe that this case was wrongly decided by the Court of Appeals. All of us are extremely disappointed with the result and will continue to pursue it."

Cohen's legal representatives released a statement expressing their disappointment following the Court of Appeals decision. In it, they outlined some of their arguments:

"We believe that the court did not adequately address a number of important issues presented by this case. Among those, we maintain that the court ignored legitimate contentions that Mr. Cohen's business operated no differently than various state-run off-track betting organizations which accept interstate wagering instructions by telephone and the Internet. Yet Mr. Cohen alone faces imprisonment for conduct that these organizations and hundreds of other businesses engage in every day. Mr. Cohen did not violate the law and we anticipate that one day the courts will recognize the legitimacy of his position."

Cohen was convicted last February of violating the Wire Act of 1961 through his involvement with World Sports Exchange, an Antigua-based online sportsbook. He and 20 other telephone/Internet sportsbook operators were targets of criminal complaints filed U.S. Attorney Mary Jo White in March 1998. He was the only person from the group to return from offshore to face a trial.

In March 2000 a federal circuit court found Cohen guilty of conspiracy as well as several counts of violating the Wire Act. Although he was eventually sentenced to 21 months in prison and fined $5,000, he has been free on bail while waiting for his appeal.

White's office would not comment on the decision.

Cohen's next step is unclear for now. "We have not made a final decision about exactly which avenue of appeal we're going to pursue right now," Sarafa said.

"We may seek rehearing with the Court of Appeals. If we are not successful with the Court of Appeals, we do intend to pursue this to the Supreme Court," she continued. "I expect we will make a decision about what our next step will be within the next week."

Deadlines for the appeal vary. "Once the courts mandate issues, his appeal is technically over unless we file a petition for cert (certiorari) with the Supreme Court, in which case we would seek a further extension of his bail pending that appeal," Sarafa said.

Should Cohen's efforts to fight the conviction fail, he would probably end up in a minimum-security facility or federal prison camp somewhere in the United States.

"We can ask the judge to recommend a certain facility if Jay wants to stay close to San Francisco, for example, which is his current home," Sarafa explained. "We could ask the court to recommend that he be placed in a facility as close as possible to San Francisco. That recommendation is not binding on the Bureau of Prisons. They do try to accommodate those to the extent that is possible, given the individual's security designation and a number of other considerations."

Cohen is still on bail pending appeal, Sarafa said. She was unable to comment on what he plans to do while deciding his next steps. Most recently, he worked in San Francisco as a stockbroker.

Cohen was unavailable for comment.

Click here to read the decision by the United States Court of Appeals for the Second Circuit in US v. Jay Cohen.