May 16, 2018

Fourth to prison in ‘pump-dump’ fraud

A Colorado lawyer caught up in a stock "pump-and-dump scheme" that so far has cost an ex-Hartford city councilman and three others their freedom and millions in losses to investors will spend three years in federal prison for her role, federal prosecutors say.

Diane Dalmy, 63, of Denver, also was sentenced Tuesday in New Haven federal court to three years of supervised release and ordered to make $2 million in restitution for her conviction on one count of securities fraud, the Connecticut U.S. Attorney's Office said.

Dalmy is currently free on $100,000 bond, authorities said.

According to investigators and court records, Dalmy was a securities attorney who did work on behalf of several public companies. However, she later connected with convicted co-conspirator
William Lieberman, of Boca Raton, Fla., and together they penned fraudulent opinion letters in her name, touting the validity of unregistered securities.

Dalmy also used her dedicated lawyer's trust account to launder about $825,000 of the proceeds her co-conspirators fleeced from victims, authorities said.

The actions of Dalmy and her co-conspirators cost unsuspecting investors millions of dollars in losses, investigators said. Dalmy collected about $30,000 in fees for her role.

In April 2017, former Hartford lawyer and city councilman Corey D. Brinson was sentenced to three years in prison. Brinson was convicted of allowing his lawyer's trust account to be used to fraudulently funnel about $3 million fleeced from investors.

In return, Brinson, authorities said, collected about 5 percent, or $200,000, from the proceeds for the use of his trust account.

As previously reported, a stock "pump and dump'' scheme involves securities in small or obscure companies that are hawked to investors as the "next sure moneymaker.'' More often than not, however, the companies have little or no products, revenues or profits. Investors in these schemes typically pay top price for stocks or securities that have little value, while the stocks' brokers and promoters walk away with the proceeds.

Last September, Damian Delgado, also known as "Michael Neumann," of Orlando, Fla., was sentenced to 7 years; and on May 7, Brian Ferraioli, of Sayville, N.Y., and Thomas Heaphy Jr., of East Moriches, N.Y., were handed 6-year sentences for their involvement, investigators said.

Meanwhile, two others, Christian Meissenn of Suffield, the alleged ringleader, and Lieberman, have also been convicted and await sentencing, authorities said.

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