An attorney from Denver, Colorado pleaded guilty this week in for her role in a scheme designed to defraud investors.
Diane Dalmy, along with co-conspirators William Lieberman of Boca Raton, Florida and Christian Meissenn of Suffield, induced investors to purchase securities by making false and misleading representations that caused the price of those securities to become falsely inflated. The issuing companies, which were essentially shell companies with virtually no legitimate business activities, were controlled by Lieberman and others. After the hype led to artificially-inflated share prices for the company’s stock, Lieberman, Meissenn and others sold their own large positions in the stock at a profit. They then ended the promotion and allowed the share price to plummet, leaving investors holding worthless and unsalable stock. As a result, victim investors lost millions of dollars.
Dalmy participated in the conspiracy by writing, and permitting Lieberman 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).
The opinion letters were materially false in various respects, including as to whether the issuing company was a shell company, whether the shareholder was an affiliate of the issuer, whether the transactions described in the letters actually had occurred, and whether Dalmy had performed the due diligence that she described in the letters.
Dalmy also ghost-wrote similarly fraudulent opinion letters in another Colorado attorney’s name and permitted Lieberman to do so as well. These included “adequacy” letters that were posted on a website maintained by an electronic securities marketplace. In general, an “adequacy” letter, which is intended to be relied upon by investors in making investment decisions, accompanies a public filing by an issuer and states that, after appropriate investigation, it is the authoring attorney’s opinion that adequate current information about the issuer is publicly available for investors to review.
Dalmy also provided the co-conspirators with capital by advancing money from her Lawyer Trust Account (IOLTA). These funds belonged to other clients of Dalmy’s law practice who did not know that their funds were being used for illicit purposes.
Finally, between February 2015 and July 2016, Dalmy laundered a portion of the proceeds of the scheme on behalf of the co-conspirators. She helped Lieberman to incorporate and open bank accounts for a private company, Queen Asia Pacific Ltd.which was controlled by Lieberman.
Dalmy periodically received money in Queen Asia’s bank accounts, transferred those funds to her IOLTA, and then transferred the funds again to Lieberman, Meissenn and their network of stock promoters. In total, she laundered approximately $825,000 on behalf of the co-conspirators through Queen Asia’s bank accounts and her IOLTA.
She faces a maximum term of imprisonment of five years, and is currently released on a $100,000 bond pending sentencing.
Lieberman, Meissenn and four other individuals have pleaded guilty to various offenses stemming from this scheme.
Her total gain from her participation in this conspiracy, and related legal work for the subject companies, was approximately $30,000.
