The government says Terrance Cosgrove’s crimes, which included bilking the widow and children of his best friend out of the money left to support them, were “diabolical.”
A man who lived a life of luxury in Seattle and Sonoma, California, on millions stolen from trusting friends and partners — then raised money from good Samaritans to pay for a new liver — will be sentenced Tuesday in U.S. District Court after pleading guilty to mail and wire fraud.
Even though he is ailing and 67 years old, prosecutors say Terrance Cosgrove’s crimes, which included bilking the widow and children of his best friend out of the money left to support them, were “diabolical” and the government is seeking a seven-year prison term and nearly $3 million in restitution.
Cosgrove is citing his poor health in asking U.S. District Judge John Coughenour to forgo prison and impose probation and community service.
According to court documents, Cosgrove suffers from skin cancer, diabetes and heart disease and nearly died from “alcohol-induced, end-stage liver disease” before he received a transplant in September 2015.
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That was two months after he was charged and agreed to plead guilty to one count of mail fraud and two counts of wire fraud, each representing a separate scheme to steal from someone close.
In August, Cosgrove and his family began raising donations to help offset the costs of Cosgrove’s transplant on a “compassionate crowdfunding” website.
Cosgrove was a respected businessman and trusted by friends and his business partner for his acumen. He was named administrator of the trusts he later stole from for that reason, according to prosecutors.
Business partners and the families of longtime friends were Cosgrove’s targets, prosecutors say. He stole millions from his partners in a fishing company and at least $335,000 — and maybe much more — from the widow and children of the dead friend and at least $500,000 from trusts belonging to the family of another longtime friend.
The exact amount of money Cosgrove stole will likely never be known because he covered his tracks, prosecutors say. However, based on a pre-sentence investigation, the prosecutor’s filings and documents in a King County Superior Court civil case and bankruptcy documents, the amount could exceed $8 million.
Cosgrove, when he was healthy enough to plead guilty last December, agreed to pay $2.9 million in restitution and forfeit cash and property worth $3.9 million.
Each of the three fraud counts carries a possible penalty of up to 20 years in prison and a fine of up to $250,000.
His defense attorney, assistant federal public defender Dennis Carroll, wrote that a “prison sentence will likely have negative consequences for his frail health.”
Cosgrove, in a letter to the court, blamed health-related stresses for clouding his judgment and causing him to lose touch with his business responsibilities.
“I started making poor decisions, which led to more poor decisions,” he wrote. “But that is no excuse. I was aware of what I was doing, but I justified it in my own mind, thinking I would somehow make it up to everyone.”
All of the thefts occurred roughly between 2008 and 2013, court documents say.
Prosecutors acknowledge that Cosgrove was struggling with illnesses — including his wife being diagnosed with cancer — but that didn’t stop him from executing three separate frauds that the government argues showed something more calculating than a series of bad decisions.
“In the words of R.M, one of the victims in this case, Terrance Cosgrove is a ‘complete crook,’ ” wrote Assistant U.S. Attorney Francis Franze-Nakamura in a sentencing recommendation filed this week.
Cosgrove is described in court documents as an already successful businessman, an investor who has owned homes on Mercer Island and Seattle, as well as the California communities of Sonoma, Napa and on a golf course in Indian Hills. Court documents describe a lifestyle of wine collections, sports cars, “upscale country clubs” and travel.
Indeed, he could have lived comfortably, even lavishly, without stealing a dime, prosecutors say.
“Mr. Cosgrove did not need to betray his closest friends and their wives to support himself or his family,” wrote Franze-Nakamura. “What drove Mr. Cosgrove’s crimes was pure greed and an unflinching wiliness [sic] to exploit the unwary and the vulnerable.”
The largest of the frauds involved Cosgrove illegally siphoning cash, sometimes $100,000 at a time, through bogus management fees charged to a Bothell fishing company he owned with several partners, ISP Trading.
He stole more than $6.1 million from his partners — some of whom he’d known for 25 years — although he paid some of it back after he was caught. For sentencing purposes, the loss was pegged at just over $3 million.
The second scheme, which overlapped the first, wiped out a trust fund set up for the widow of Cosgrove’s best friend and her children.
When his friend died, Cosgrove agreed to administer the trust, but prosecutors said he ended up treating it “as his personal slush account.”
He stole at least $335,000 from that account, according to the plea agreement, but the loss was likely much more. Prosecutors said Cosgrove “conveniently did not maintain records.” By some estimates, the trust should have contained millions.
The widow wound up losing her home to pay for taxes and avoid foreclosure, according to the plea agreement.
“Although he still makes payments on his 2000 Porsche Boxster, and lives in a four-bedroom … rental home in Napa, California, Terrance Cosgrove has not been willing to make even a token monthly payment” to the woman, Franze-Nakamura wrote.
The third scheme involved theft from trusts belonging to the wife and two children of another longtime friend, which he raided for nearly $500,000, according to the plea agreement.
“Only a seasoned financial predator could have looked these friends and their families in the eye and assured them that he was looking out for their best interests,” Franze-Nakamura wrote, in asking for prison.