Attorney Who Hid Money to Avoid Paying Restitution to Fraud Scheme Victims Receives 2 More Years in Prison

DOJ - Department of Justice
DOJ - Department of Justice
This post was originally published on this site

John H. Durham, United States Attorney for the District of Connecticut, announced that DIANE DALMY, 63, of Denver, Colorado, was resentenced today by U.S. District Judge Jeffrey A. Meyer in New Haven to 60 months of imprisonment, followed by three years of supervised release, for her role in a securities fraud scheme, and for hiding money after her original sentencing proceeding earlier this year to avoid paying restitution to victims of the scheme.

According to court documents and statements made in court, between January 2009 and July 2016, Dalmy used her position as an attorney to assist others in defrauding thousands of investors through a stock “pump and dump” scheme.  During the scheme, Dalmy wrote, and permitted a co-conspirator to write in her name, fraudulent opinion letters that were used to unrestrict the co-conspirators’ stock so that the stock could be freely traded on the open market, without having to register the stock with the Securities and Exchange Commission.  Dalmy also provided fraudulent “adequacy” letters that were intended to mislead investors who were making investment decisions.  At times, she also provided co-conspirators with capital by advancing money, which belonged to other clients of her law practice, from her Lawyer Trust Account (“IOLTA”).  Finally, Dalmy laundered approximately $825,000 in proceeds of the scheme through a bank account for a private company she helped incorporate, and her IOLTA.

As a result of the fraud scheme, more than 12,000 victim investors collectively lost nearly $19 million.  Dalmy’s total gain from her participation in this conspiracy, and related legal work, was approximately $30,000.

On February 6, 2018, Dalmy pleaded guilty to one count of conspiracy.  In March 2018, she provided the court with a financial affidavit that required her, under penalty of perjury, to disclose all of her financial resources.  On May 15, 2018, Judge Meyer sentenced Dalmy to 36 months of imprisonment and ordered her to pay $2 million in restitution.

After her original sentencing and prior to her reporting to prison in June 2018, Dalmy attempted to hide approximately $47,000 in cash.  The money had been omitted from her financial affidavit.

In July 2018, the government notified the court of Dalmy’s willful failure to pay restitution.

Judge Meyer ordered a resentencing hearing and, today, sentenced Dalmy to an additional 24 months of imprisonment, for a total sentence of 60 months of imprisonment.

This investigation was conducted by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation Division, with assistance from the Connecticut Department of Banking, U.S. Postal Inspection Service, and Hartford and Stamford Police Departments.  The case was prosecuted by Trial Attorney Avi M. Perry of the Department of Justice’s Fraud Section, who has been designated as a Special Assistant U.S. Attorney for this matter.