Trevor Cook’s Plea Agreement Requires Cooperation With Government, Receiver To Recover Assets; Polygraph Exam May Be Used If He Ducks Disclosure Requirements

Convicted Ponzi schemer Trevor Cook’s plea agreement requires him to take a lie-detector test “if requested” by prosecutors to determine “whether he has truthfully disclosed the existence of all of his assets and the use of the fraud proceeds.”

Meanwhile, the nine-page agreement requires Cook to cooperate with the government and R.J. Zayed, the court-appointed receiver in the $190 million Ponzi scheme and fraud case, to recover assets.

Cook’s lack of cooperation with investigators and Zayed is what landed him in jail in January, after a federal judge found him in contempt of court. Now facing the possibility of 25 years in prison — or longer, if his plea deal collapses as a result of noncooperation — Cook is required to “fully and completely disclose to the United States Attorney’s Office the existence and location of any assets in which he has any right, title, or interest and the manner in which the fraud proceeds were used.”

Cook, 37, also waived his right to appeal his sentence — unless the judge in the case sentences him to more than 25 years.

“This plea agreement is binding on the parties, but it does not bind the Court.” prosecutors said. “The parties understand that the Sentencing Guidelines are advisory and their application is a matter that falls solely within the Court’s discretion. The Court may make its own determination regarding the applicable guideline factors and the applicable criminal history category. The Court may also depart from the applicable guidelines.”

As a small carrot to Cook, prosecutors agreed not to object if Cook’s sentencing judge gives him credit for the time he already has served since Chief U.S. District Judge Michael Davis ordered him jailed in January.

Davis is hearing the civil cases filed by the SEC and CFTC in November. He will not be the sentencing judge in the criminal case, which was filed last month. That duty falls to U.S. District Judge James Rosenbaum.

Rosenbaum let it be known yesterday that Cook’s days of stonewalling investigators were over.

The Star Tribune newspaper of Minneapolis/St. Paul quoted Rosenbaum as saying he’d reject the plea bargain if Cook tried to snooker the government.

Among the allegations against Cook was that he spent investors’ money to pay gambling debts. Rosenbaum, according to the Star Tribune, admonished Cook that he’d better keep his end of the deal or else.

“That’s not a threat. That’s not a promise,” the newspaper quoted Rosenbaum as saying. “That’s like saying it’s raining outside — it’s a fact.”

Read Cook’s plea deal.

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