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Lawyer Who Hid Money To Avoid Paying Fraud Scheme Victims Restitution Gets Additional Sentence

U.S. District Court in New Haven.
U.S. District Court in New Haven. Photo Credit: Google Maps

A lawyer already behind bars for helping to facilitate a $19 million fraud scheme received an increased sentence after she attempted to hide nearly $50,000 in cash from the government.

Diane Dalmy was sentenced in New Haven District Court to 60 months in prison, followed by three years of supervised release for her role in a securities “pump and dump” scheme. She was also found guilty of attempting to hide $47,000.

From January 2009 through July 2016, Dalmy, who now lives in Denver, used her position as an attorney to assist others in defrauding more than 12,000 investors out of nearly $19 million total.

During the scheme, Dalmy wrote and allowed a co-conspirator to write fraudulent opinion letters to investors that unrestricted the co-conspirator’s stock so it could be traded on the open market without being registered with the SEC. U.S. Attorney John Durham said Dalmy also provided fraudulent “adequacy” letters that were intended to mislead investors who were making investment decisions.

Dalmy also provided co-conspirators with capital by advancing money, which belonged to other clients of her law practice. She was also responsible for laundering approximately $825,000 in proceeds of the scheme through a bank account for a private company she helped incorporate.

On Feb. 6, Dalmy pleaded guilty to one count of conspiracy. In March, 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 Dalmy was sentenced to 36 months of imprisonment and ordered 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, the court was notified by the government of Dalmy’s scheme to hide the money, and a resentencing hearing was scheduled. At that hearing, Judge Jeffrey Meyer tacked on an additional 24 months to her sentence, making it a total of 60 months.

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