Prison Sentencing
There’s new action in a stock manipulation scheme orchestrated by a Suffield man.
NEW HAVEN – A lawyer from Colorado who participated in a penny stock manipulation scheme orchestrated by a Suffield man had two years added to her federal prison sentence after authorities learned she lied on a financial affidavit.
Diane Dalmy, 63, of Denver, was resentenced Friday in U.S. District Court in New Haven. On May 15, U.S. District Judge Jeffrey A. Meyer sentenced Dalmy to three years in prison and ordered her to pay $2 million in restitution.
She had previously pleaded guilty to one count of conspiracy for her role in the criminal enterprise that stole more than $19 million from 12,000 victims through penny stock manipulation.
The scheme was headed by Christian Meissenn, 46, of Suffield, who was sentenced last week to three months in prison and three years of house arrest. The judge called Meissenn a brazen criminal who made committing fraud and being a con artist a way of life.
According to the government, Dalmy signed phony attorney opinion letters that falsely certified the legitimacy of what are known as pump-and-dump penny-stock transactions. She previously was barred from securities work by the federal Securities and Exchange Commission for issuing the same sort of letter in an earlier stock offering and profiting from the resulting fraud.
Dalmy also admitted that she allowed one of the other conspirators to use her law firm trust account to move money.
After her guilty plea and sentencing to three years in prison in May, Dalmy tried to hide about $47,000 in cash by not including it on the financial affidavit she was required to file. For her “willful failure to pay restitution,” Meyer added two years to her sentence on Friday.
Corey Brinson, a former Hartford lawyer and city councilman, was convicted of the same conduct as Balmy and sentenced to three years in prison. He is already out of prison.
In pump-and-dump schemes, conspirators acquire blocks of stock in worthless shell companies and pitch the companies to investors as being on the cusp of a commercial breakthrough, often in fields such as rare earth mining or software development.
The stock manipulators used rigged stock trades, phony announcements about business developments — often delivered to millions of inboxes by unscrupulous internet spammers — and other fraudulent means to pump up share prices of the stock, much of which they control.
As share values, which trade for pennies, rise rapidly, salesmen pitch the stocks to unsophisticated investors. As values peak, the conspirators dump, or sell, their stock, causing the value to collapse, and leaving unwitting investors with worthless shares.