‘Cope Court’ donor withdraws $1 million gift

Doug Brown

A $1 million gift from Kent State alum Jason M. Cope and his wife, Stacie, was unexpectedly withdrawn Friday. Kent State planned to name its basketball court “Cope Court” in a ceremony Jan. 14 before the men’s game.

The announcement of the withdrawal came after the Daily Kent Stater made inquiries into the past of Jason M. Cope, a 1995 Kent State finance graduate. Cope was the branch manager of a financial firm that defrauded 190 investors of $8.7 million in late 1999 and early 2000. Cope was one of four defendants required to pay a total of more than $19 million in penalties, according to litigation from the Securities and Exchange Commission and court documents.

Asked about the $1 million donation and Cope’s SEC violations on Jan. 4, athletic director Joel Nielsen said that “it was an action that was 12 years ago, it was fully litigated and he abided by the letter of the litigation.

“Obviously we were aware of the litigation of 10 to 12 years ago,” he said about Jason Cope, who was to become the namesake of the basketball court. “We’ve had the discussion with the donor, and we are comfortable in not only where he stands but where we stand in that relationship.”

Prior to the withdrawal of the donation, numerous attempts to reach Cope by listed phone numbers, by email and by phone at the golf course he owns, in person at his Gates Mills address listed by the Cuyahoga County auditor and through the Kent State athletic department were unsuccessful.

An email from Todd Vatter, interim director of athletic communications at Kent State, was received at 4:19 p.m. Friday and stated, “Due to unforeseen changes, Jason Cope has found it necessary at this time to withdraw his gift to the athletic department. The university understands this decision and appreciates the Copes’ thinking enough of Kent State to consider their generous donation. We look forward to an opportunity in the future to engage them in the life of Kent State.”

Cope and his wife are the co-owners of several golf courses under their company Copeland Group, LLC. The pregame ceremony was to reveal a 10-foot by 5-foot Cope Court logo on each sideline, according to the athletic department.

Announcing the donation and the Cope Court name in mid-December, Nielsen said in a press release, “This leadership gift assists in providing the necessary resources to uphold the national prominence of our men’s basketball and men’s golf programs.”

The SEC complaint

According to SEC records, Cope opened a branch of A.C. Financial in Pittsburgh in 1999 and soon began to sell phony stocks to investors sent to him by Ira Monas, the president of Milan Capital Group in New York, who reportedly hatched the plan right before serving an unrelated prison sentence for grand larceny.

Milan Capital Group, led by Monas, and A.C. Financial, led by Cope, “offered and purportedly sold to investors shares of four ‘hot’ IPOs,” — highly publicized initial public offerings of securities — and received $8.7 million from 190 investors, according to SEC litigation.

Investors thought they were purchasing shares of Worldwide Wrestling Federation Entertainment, United Parcel Service, Inc., FogDog, Inc. and Freemarkets.com, Inc., court records show. Cope and Monas did not have access to those shares.

The complaint said, “Money from investors was used to pay Cope and other salespeople in A.C Financial’s Pittsburgh office, and to pay for Milan Capital’s operating expenses and personal expenses of Monas and his family,” according to the Pittsburgh Post-Gazette in March of 2000.

They were running a Ponzi scheme, according to SEC litigation. “The defendants stole the investors’ money and, to create the illusion of legitimate stock purchases, gave the investors phony trade confirmations and account statements,” paid small amounts back to some original investors “and falsely represented these monies as repayment of principal and profits on the sham IPO investments.”

In January 2000, just months after the scheme began, the SEC brought a case against Cope, Monas and their firms. The bank accounts were frozen, and charges were expanded in the following months.

Courts found the defendants violated anti-fraud provisions of federal securities laws and charged Cope, Monas and another Monas associate with aiding and abetting Milan Capital’s violation of brokerage registration provision.

In August 2001, a United States District Court in New York ordered Cope and Monas to pay a civil penalty of $10 million because their “violations of the anti-fraud provisions involved fraud and deceit and resulted in substantial losses to investors.” The court also found Monas, Cope, Milan Capital Group and A.C. Financial “jointly and severally liable for disgorgement and prejudgment interest” for more than $9.39 million.

The SEC said on Thursday that the amount Cope individually paid — and if or when it was paid off — would not be made public.

Documents from the Financial Industry Regulatory Authority reveal that soon after Cope was notified of the SEC investigation in 2000, he left A.C. Financial to work for I.A.R. Securities on Wall Street in New York City. He was soon disqualified for employment by the National Association of Securities Dealers because of the SEC investigation.

“The public interest would not be served by Cope’s continued association with I.A.R. and that Cope represents an unreasonable risk of harm to the market and investors,” stated the document.

The document also revealed several other complaints — including misrepresentation and theft — made against Cope when he was employed by Fairchild Financial Group. He was an investor there from the time he graduated from Kent State until leaving for A.C. Financial in 1999.

According to a 2003 SEC filing by Biophan Technologies, Inc., Cope had become an owner of Westbay Consulting, Inc. and was paid $107,503 and given Biophan stock for brokering private-placement stocks for the company. The SEC alleged that Biophan was in violation of SEC regulations by using Cope, who was barred from being a stockbroker.

“If Biophan had been aware of Mr. Cope’s prior violations of the securities laws it would not have hired Westbay to assist in private placement,” according to Biophan’s filing.

In 2005, Cope and his wife Stacie established their current business venture, The Copeland Group, LLC, and purchased several Ohio golf courses, including Copeland Hills in Columbiana.

Cope has recently become a member of the National Athletic Development Council at Kent State, a group that Nielsen says meets throughout the year and advises the athletic department in fundraising efforts. He was a featured speaker during November’s “Founders Gala” at Kent State, recognizing donors to the university.

“We share in the thoughts of our current coaches and administration that believe strongly in the mission of Kent State athletics and the development of well-rounded student-athletes,” said Cope in the December press release announcing the $1 million donation. “We know that our commitment will make a significant impact and be a difference-maker.”

“This is an alum that has been a very strong supporter of our program for years, and we are very comfortable with what we know to this point,” said Nielsen when asked if the SEC charges had any impact on the decision to take the donation and name the court after Cope. “The gift is something in the best interest of the university and the department.”

Contact Doug Brown at [email protected].