eCast Founder Accused of $18 Million Fraud

Last week, peHUB reported that eCast Network founder Samuel “Mouli” Cohen had been sued for allegedly defrauding a charitable organization out of approximately $18 million.
We incorrectly identified the suit’s plaintiff as the charity itself, Vanguard Public Foundation, rather than the correct plaintiffs: Samuel Mills and Mary Dalsin Mills, self-described Vanguard benefactors, in their individual capacities and as trustees of the Mills Family Trust. According to the suit, the Millses indirectly purchased shares in eCast, via investor groups set up by Vanguard president Hari Dillon and Vanguard co-chairman Danny Glover. Mills also allegedly paid Cohen directly for various fees and expenses related to a purported acquisition of eCast by Microsoft.

We note that Vanguard Public Foundation did not invest in eCast, nor did it file suit against Cohen or make any public allegations of fraud against Cohen.
It also is worth noting that we happily make these corrections at the behest of Cohen himself, who has threatened litigation against us (read letter here). In that spirit, below is an updated post — with the names changed where appropriate.

peHUB stands by its assertion, based on multiple sources, that Microsoft had not agreed to acquire eCast Network. Finally, we did send an email to an old email account affiliated with Mouli Cohen (, and received a reply. We replied with a request to speak with Cohen, but never heard back.


In August 2002, actor Danny Glover attended a dinner party at the Marin County home of Samuel “Mouli” Cohen, founder of VC-backed digital jukebox company eCast Network. The festivities were to mark the launch of Cohen’s new philanthropic organization, and Glover was there as a representative of Vanguard Public Fund, a San Francisco-based charity focused on eradicating racism. Cohen was immediately impressed by Glover’s sales pitch (after all, he’s Roger Murtaugh), and sat down for lunch just two days later with Glover and Vanguard president Hari Dillon.

The subsequent relationship spanned nearly five years, but came to a crashing halt earlier this month, when two self-described Vanguard benefactors sued Cohen for fraud, breach of contract and breach of fiduciary duty. Seems that approximately $18 million changed hands between the two parties – sometimes with Dillon and Glover acting as middlemen — but not in the direction you might imagine.

In their complaint, the Millses describe an ongoing deception that would put Cohen’s audacity on par with that of Bernie Madoff. Specifically, Cohen allegedly offered investment groups managed by Dillon and Glover – both supported by Mills — the opportunity to purchase some of his personal shares in eCast, of which he was still executive chairman. Moreover, Cohen claimed that Microsoft had quietly agreed to acquire eCast at a “1 to 1 peg.”

In other words, Mills would help buy shares for $3.50 a piece, and get paid off in Microsoft stock that was trading at around $23 per share. Mills would then give “all or a portion” of those monies to Vanguard.
All the acquisition needed to do was clear some regulatory and legal hurdles. Cohen added that no one should mention the pending acquisition to anyone, because press leaks could cause Microsoft to back out.
Soon after, the investment groups allegedly agreed to buy 600,000 eCast shares from Cohen, for approximately $2.1 million.

So good so far, except for one giant problem: Microsoft had not agreed to buy eCast. In fact, sources at eCast and Microsoft tell me that the two sides never even held serious M&A discussions. It was a total ruse.
But Cohen allegedly kept up the grift, convincing the investors to buy more and more shares. By the end of July 2003, Mills and company had shelled out just over $6.2 million. That date is also important because on July 11, 2003, Cohen and eCast were named as defendants in a civil suit by individuals who accused Cohen of a very similar fraud to what I’m describing in this post (note: eCast is also named in the Mills suit, since some early Cohen/Dillon/Glover meetings occurred at the company’s offices). The case was settled out of court, as was a subsequent case filed in February 2004.

Beginning in late 2004, the suit alleges that Cohen told the Dillon and Glover Groups that all eCast shareholders were required to pay certain transaction and legal fees related to the still-pending acquisition. In a meeting at Cohen’s home, Hari Dillon and Samuel Mills asked what was taking so long. Cohen supposedly replied that eCast was considering a rival offer from Google. It was another bogus claim, according to an eCast source, but the Vanguard-affiliated folks continued to believe. More importantly, they continued to pay — to the tune of another $11.5 million!

By May 2007, Mills was struggling from the weight of his (unrealized) financial commitment to eCast. He began discussing some sort of buyout with Cohen, who continued to insist that the Microsoft deal was proceeding. The complaint alleges that Mills reached an oral agreement with Cohen (via Hari Dillon), whereby Cohen would buy back Dillon and Glover Group’s shares at $19 each (which would still be a “value” for Cohen, given the price of Microsoft’s stock). Mills also claims to have executed related paperwork prepared by Cohen.

But Cohen never signed the papers. Instead, he began talking about how a “tough environment” was making the deal difficult to close. When Mills and others questioned the deal’s existence, Cohen didn’t provide a satisfactory answer, thus prompting the lawsuit. Among his requests, Mills is asking for remuneration of the $19 million.

eCast has raised around $105 million in total VC funding, from firms like El Dorado Ventures, DCM, Crosslink Capital, Electronic Arts, Focus Ventures and Mobius Venture Capital. In an official statement, the company said:

“eCast has had no affiliation with Mouli Cohen since Oct. 2002 when he resigned from the Company as chairman.  The Company is sympathetic to the parties that were allegedly defrauded out of their investments, and will fully cooperate in any efforts by the authorities to investigate and prosecute any wrongdoing.”

I also tried reaching Cohen, via an email address listed on a cached page of a now-defunct website he used to run. Someone replied that the account was still active, but I have not heard back since explaining the discussion topic.

What follows is a copy of the complaint:

Mouli Cohen v Mills_04 13 09_First Amended Complaint