The Wolf Hound

Sixteen years ago, Joel Cohen ’84 took down a now-infamous con man. And he doesn’t want you to forget what a heinous guy Jordan Belfort truly is.

By Carolyn Kormann ’04
Photographs by Jon Roemer

This story originally appeared in the Spring 2014 issue.

In 1997, when Joel Cohen ’84 was an assistant U.S. attorney in Brooklyn, he took over his office’s investigation of Jordan Belfort, the memoir-writing fraudster who made tens of millions of dollars peddling penny stocks. An FBI special agent named Gregory Coleman had been pursuing Belfort’s firm, Stratton Oakmont, since 1992 with a series of prosecutors, but he still lacked the evidence necessary for an indictment. One day, Coleman arrived in Cohen’s office and unrolled a 14-foot-long scroll on a table. Coleman had scribbled names, places, dates, and numbers across the paper in colored markers, tracing the outlines of Belfort’s criminal enterprise.

“I remember looking at it and thinking, ‘What can I do with this?’” Cohen said recently. Then he noticed a few scrawls suggesting that Belfort and his partner, Danny Porush, were laundering their money in Switzerland. Cohen decided that was the lead to follow. “We should try to lop off the head of this organization instead of the feet,” he recalled thinking.

The linchpin for the Swiss strategy turned out to be a tattoo-covered drug dealer named Todd Garrett. Coleman had already started investigating Garrett and his wife, Carolyn — a housewife who was investing hundreds of thousands of dollars through an account with Stratton Oakmont. She was making a lot of money. She happened to be a Swiss citizen. Coleman had also heard that Todd Garrett was dealing drugs, specifically Quaaludes, to Belfort and other Strattonites. Coleman then received another useful clue. In 1995, a security guard at a mall in Queens had called the NYPD to report a suspicious meeting. A Bentley had pulled up to a black limousine. Two men got out and started arguing, then one passed the other a black suitcase. When the police arrived, they found Garrett in the limo with the suitcase, full of cash, and a gun. They arrested him for illegal firearm possession and seized the cash, figuring they had busted a drug deal. But maybe it had been something else.

Coleman and Cohen subpoenaed security-camera footage from the mall and got a grainy rendering of the meet-up. “We knew Danny Porush was driving a Bentley, and we figured it was a cash drop,” Cohen said. They continued to investigate Garrett’s wife and obtained travel manifests showing that she was making frequent trips to Switzerland. The facts suggested that she and Garrett were Belfort’s cash mules. The trick would be getting Garrett to talk.

“He wouldn’t flip,” Cohen said. “We knew his wife was involved; we threatened to indict his wife, and he didn’t care. He was a Hells Angel, a black belt in karate. Even with a lawyer and an FBI agent sitting next to you, you think, ‘This guy is going to rip my head off!’”

Cohen discovered that they had a trump card. As tough as Garrett looked and acted, he had a weak heart. Some years before, he had contracted a rare virus in Brazil. Now he needed a heart transplant. He was on the transplant waiting list. Cohen did some research and learned that federal prison inmates are not given new hearts. He knew he could indict Garrett for drug dealing — he already had a former Stratton broker who said he had bought Quaaludes from Garrett.

“We told him, ‘If you don’t cooperate and we indict you and you end up going to jail, you won’t get a new heart, and you’ll die,’” Cohen told me. “‘I’m just telling you the way it is. You want a new heart? Do the right thing, talk to us, and you get a new heart.’”

Garrett cooperated.

One of Belfort’s Swiss bankers also cooperated, and the Swiss authorities then came through with some crucial documents. On the Tuesday before the Labor Day weekend of 1998, less than two years after Cohen joined the investigation, FBI agents arrested Jordan Belfort in his mansion on Long Island.

I visited Cohen at home in Boerum Hill, Brooklyn, in February. He greeted me at the door with his labradoodle, Louie, by his side. Cohen has a genial, direct manner. His house was sunny, warm, uncluttered. There was no trace of the “disheveled . . . world-class bastard with a degenerate slouch” — Belfort’s description of Cohen in his second tell-all memoir, Catching the Wolf of Wall Street, which recounts the year after his arrest, most of which he spent wearing a wire for the U.S. government.

“I’m all over the second book,” Cohen said. “He calls me the bastard about a thousand times. My kids think it’s hilarious.”

Cohen has two sons and a daughter. Sam, a junior in high school, was reading the paper when I arrived, and Mariana, a seventh grader, was on her way to a cello rehearsal. His wife, Karyn Zieve, an art history professor at the Pratt Institute, stopped in to say hello. The whole family was headed to England in a few weeks to visit Harry, a junior at Middlebury, who is studying at Oxford for the spring semester.

Cohen left the U.S. Attorney’s office when Harry was five. Stratton Oakmont was his last investigation for the government. He is now a partner with Gibson, Dunn & Crutcher, where he represents banks and multinational corporations in financial disputes, insider-trading cases, class actions, and anti-corruption investigations. He has won many awards, a few for his pro bono work. He led a legal team that sued, on behalf of eight immigrant day laborers, the city of Danbury, Connecticut, and the federal government, for racial profiling and arrests without probable cause — a case that resulted in perhaps the largest settlement ever won by day laborers. This summer, Cohen is volunteering for Lawyers Without Borders in Kenya, where he will teach prosecutors and judges how to build evidence in a corruption trial.

Still, Cohen’s prosecution of Jordan Belfort has garnered more attention than anything else he’s done. He even received an invitation to appear on Dr. Phil to talk about Belfort. (Cohen declined.)

Martin Scorsese’s film The Wolf of Wall Street, adapted from Belfort’s first memoir, opened in theaters on Christmas Day 2013. Cohen went to see it over the holiday. He left the theater so angry that he immediately sat down and wrote an op-ed when he got home. He sent it to the New York Times, which published it online, under the headline, “The Real Belfort Story Missing from ‘Wolf’ Movie.” The piece quickly bounced around the Web and was widely quoted and shared.

Cohen was mostly frustrated with the film’s ending. In real life, Jordan Belfort is out of prison and runs a motivational speaking company. He makes money by charging people to listen to him talk. The movie’s last scene portrays these facts, with a camera panning over a stupefied audience at a fictional Belfort event. The twist comes when the announcer who introduces Belfort (played by Leonardo DiCaprio) appears. It’s the real Jordan Belfort. Behind him, a large sign advertises Straight Line, the real Belfort’s new company.

“To his victims, it is beyond an insult. And for anyone who is enticed to pay Mr. Belfort to hear his recordings and speeches, it aids and abets this unrepentant character in possibly duping others yet again.”

“Some might think the movie’s ending is a cute conceit: putting the artist and his muse together on a stage for a final scene,” Cohen wrote in the Times. “To his victims, it is beyond an insult. And for anyone who is enticed to pay Mr. Belfort to hear his recordings and speeches, it aids and abets this unrepentant character in possibly duping others yet again.”

Cohen told me that there was no cinematic reason for Belfort to appear in the last scene. “OK, so you want to suggest that crime does pay, and Belfort is coming back. So, fine, have DiCaprio do that scene. But why the real Belfort?” Cohen sighed. “You should give cameos to real people who you want to herald and celebrate.” Cohen also seethes at the fact that Belfort was invited to the film’s premiere.

“Scorsese and the whole project’s team might have convinced themselves that they were just telling it like it is,” Cohen said. “Shining a light on a dark side of America. In fact, they’re really caught up in it. They love it.”

After Belfort’s arrest in 1998, he was released on 10- million-dollar bail — a good chunk of which he paid with his wife’s jewels. The FBI also arrested Porush. In the movie, there is a scene depicting Belfort’s first meeting with federal prosecutors. One tells Belfort that the U.S. Attorney’s case against him is a “Grenada,” meaning that its outcome is as guaranteed as the outcome of the U.S. invasion of Grenada, a tiny island nation, in 1983. Cohen said that such a conversation “never happened,” and that “Grenada” was not a term he knew. The evidence against Belfort was solid, however, and Cohen said that the only deal he would cut would require complete and total cooperation. Belfort and Porush would have to plead guilty to all the charges against them. When Belfort balked, Cohen threatened to indict Belfort’s wife, Nadine, for money laundering. The threat worked. Belfort became a government witness.

For the next four months, Cohen and Coleman met with Belfort or Porush every day for debriefings. “Most people who commit crimes, they do one or two things,” Cohen said. “You meet with them for a few days, and you get the whole story. These were guys who woke up every day and committed crimes.” Hence the four months of talk. Neither Belfort nor Porush (who remained in jail) knew that the other was cooperating. Cohen could therefore ask them both about the same subjects, and thus test their veracity. Belfort’s and Porush’s wild stories were unlike anything Cohen had heard before, but they matched. The two men seemed to be telling the truth.

In the film, the two crooks’ relationship (Jonah Hill plays Porush) is the only one with any heart, despite considerable Quaalude-laced absurdity. This turns out to be fiction. “They were blabbing away against each other,” Cohen said. “They relished talking about each other. They relished talking about everybody.” The debauchery in the film is, on the other hand, “absolutely true,” Cohen said. When he saw the movie, it was like watching “a dream sequence of stuff I lived, because I already knew all the stories. They really did happen.” It was everything Belfort had told him during the debriefings: nearly sinking his yacht before being rescued by the Italian Navy; hiring prostitutes wherever he went; crashing his Ferrari while zonked on Quaaludes. Such details weren’t particularly relevant to Cohen’s mission, which was to indict dozens of other swindlers in Belfort’s network. “But we were using him as a witness, and we had to be prepared for everything that would come out in the cross-examination,” Cohen said. He meant any defense lawyer’s inevitable attempt to discredit Belfort’s testimony: “And tell us about the next day, Mr. Belfort, when you were throwing midgets…”

By late 1998, Cohen’s team was ready to put Belfort and Porush back on the street. Their guilty pleas were a secret, filed under seal, so they could pretend that they were fighting the charges. Belfort would meet people in Manhattan restaurants like Bice, a tony Italian spot favored by his crowd. Porush was sent back to Boca Raton, Florida, where he had been living before he was arrested. They were both still involved in enough criminal activity that many of their associates began to quickly incriminate themselves. Others were more circumspect. In those cases, the informants had to improvise, to come up with stories that would make the target relax.

“Belfort was a great liar,” Cohen said. “He had good scams, good ideas. Danny was good, too, and they’d get people to talk. Those skills hadn’t diminished.” Still, Cohen often had to create scenarios for Belfort to use. “That wasn’t as much Greg’s forte,” he said, referring to Coleman. “I’m a good liar,” he added. He laughed, explaining, “We had to come up with stories that made sense.”

When the FBI works with informants, there is always the chance that they’ll break the rules. In Wolf, after Belfort pleads guilty, he meets with Porush and passes him a note that says, “I’m wearing a wire. Don’t incriminate yourself.” This did happen, but not with Porush. The real Belfort passed such a note to his lifelong friend and Stratton broker, Dave Beall. Beall’s father-in-law was an adviser and friend to U.S. Senator Alfonse D’Amato, the chairman of the Senate banking committee, which oversees the securities industry. D’Amato opened an account with Stratton Oakmont, through Beall, and turned a significant profit. Cohen had made recording Beall a high priority.

Belfort met with him several times. When the tapes came back, “Beall was saying nothing,” Cohen said. “It was weird.” After about six months, Cohen and Coleman confronted Belfort. He played dumb at first. Coleman kept questioning him, and then just glared at him, waiting. (Cohen demonstrated the FBI glare for me. “FBI agents are trained to do this,” he said, deadpan.) After a few minutes, Belfort started to cry. He confessed to passing Beall the note. He said he couldn’t betray Beall. He liked him too much.

“I don’t know if he was bullshitting us or not,” Cohen said. “We were livid. I wanted to rip up his agreement.” But it was too late. They had too many cases going thanks to Belfort’s help. So the prosecution decided to charge him with obstruction of justice and to continue using him as an informant.

After a year, Cohen’s team had almost reached the end of its list. Not everyone had taken the bait, but Belfort and Porush had gone “cold.” Most people would no longer talk to them about anything illegal. It was time to unseal their records and make public the fact that they had been cooperating — what Cohen called “shaking the tree.” Some people who hadn’t even been on the target list panicked when they heard that Belfort and Porush were informants. They got lawyers and turned themselves in to prosecutors.

Belfort was sentenced to three and a half years in a federal prison camp. He would have faced more than 20 years if he hadn’t cooperated. “I was shocked when I heard his sentence,” Cohen said. “I thought he’d at least get more than five.” The judge, known for rewarding informants, had seen Belfort testify, and was impressed with the extent to which he had helped the government. Cohen was annoyed, but he had moved on to private practice. He later heard how easy it had been for Belfort. “His bunkmate in prison was Tommy Chong!” — of Cheech and Chong fame — “who said to him, ‘You should write a book.’” Belfort walked free after 22 months with the memoir that would become Wolf already in the works.

Cohen comes from a family of lawyers. His sister, Debra, was a litigator before her death, in 2001, from ovarian cancer. His father still practices law in Pittsfield, Massachusetts, where Cohen grew up. Now his son Harry is talking about law school.At Middlebury, Joel Cohen studied history — his thesis adviser was John McCardell — and, when he graduated, he was torn between becoming a historian or a litigator like his father. He applied to law school and to PhD programs. The history departments at Harvard and Yale accepted him, but he was steered toward law after meeting fifth-year students at each school who were headed to law school next because they couldn’t find jobs in academia. Duke University offered a three-year dual program — a JD and an MA in history — which made his decision easy. After passing the bar, he spent three years at a boutique New York firm and then joined the U.S. Attorney’s office.

Looking back on his time at Middlebury, Cohen says that it taught him how to think critically, to question, and to withhold judgment until enough facts develop. “In a sense, I learned more about being a lawyer at Middlebury than in law school,” he said.

Cohen is still mad about Scorsese’s film. For him, there was at least one edifying aspect of the experience, though. His commentary in the Times and elsewhere struck a chord with the public, provoking a lot of criticism of the film. Some of Belfort’s victims came forward. “I feel kind of gratified,” Cohen said. “It’s a very small piece of the world, and I recognize that. But it was good for my kids to see. If you know something about the past and you speak up, you can actually change the dialogue.”

Caroyln Kormann ’04 is a deputy head of fact-checking for the New Yorker. She has written for newyorker.com, NPR, the Virginia Quarterly Review and other publications. She graduated from Middlebury with a degree in English and Spanish and later was a Middlebury Fellow in Environmental Journalism.