A Colorado attorney has admitted to her role in a stock ‘pump and dump’ scheme that left investors with millions of dollars in losses.
Diane Dalmy, 63, of Denver, Colorado, waived her right to be indicted and pleaded guilty today before U.S. District Judge Jeffrey A. Meyer in New Haven to one count of conspiracy stemming from her role in the scheme.
According to court documents and statements made in court, Dalmy performed securities-related legal work on behalf of several public companies, including Mammoth Energy Group, Inc., and Fox Petroleum, Inc. Between approximately January 2009 and July 2016, Dalmy conspired with others, including William Lieberman, of Boca Raton, Florida, and Christian Meissenn, of Suffield, Connecticut, to defraud investors through a stock ‘pump and dump’ scheme.
As part of the scheme, Lieberman, Meissenn and others induced investors to purchase securities by making false and misleading representations in calls, emails and press releases concerning the securities and the issuing companies, thereby causing 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. 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.
The scheme, which took place between 2009 and 2016, resulted in millions of dollars in losses for investors. Dalmy laundered approximately $825,000 on behalf of the co-conspirators, transferring funds through her IOLTA and bank accounts.
Dalmy’s guilty plea marks a significant milestone in the investigation and prosecution of the scheme. Her sentencing is pending, and she faces a maximum sentence of five years in prison.
Key Facts
- State: Connecticut
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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