David Tamman, Obstruction of Justice, California 2009

LOS ANGELES – A Santa Monica lawyer who helped cover up a $22 million Ponzi scheme has been sentenced to 84 months in federal prison. David Tamman, 46, was sentenced by United States District Judge Phillip S. Gutierrez, who also ordered the defendant to pay a $2,500 fine.

Tamman, a partner at the Nixon Peabody law firm, was found guilty of 10 counts, including obstruction of justice, altering records in a federal investigation, and being an accessory after the fact to the fraud scheme. The evidence presented at the trial showed that Tamman conspired with John Farahi, who operated the Ponzi scheme, to obstruct an SEC investigation into the fraud scheme.

Prosecutors said that in 2009, in response to an investigation being conducted by the Securities and Exchange Commission, Tamman and Farahi altered and created securities offering documents and promissory notes, as well as lied to the SEC and Tamman’s colleagues.

“Despite being a highly educated lawyer, defendant David Tamman has displayed a remarkable disrespect for the law and the legal system over the course of almost a decade,” prosecutors wrote in a sentencing brief.

Farahi, a former investment fund manager and radio personality, was sentenced in March to 10 years in federal prison for running the $24+ million scheme. The case against Farahi and Tamman is the result of an investigation by the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) and the Federal Bureau of Investigation.

The SEC provided substantial assistance during the investigation. “Today justice was served for Tamman’s attempted massive cover-up of John Farahi’s multi-million dollar Ponzi scheme in which Farahi lied to investors and claimed that he was investing in safe, TARP-backed corporate bonds,” said Christy Romero, Special Inspector General for TARP (SIGTARP).

Tamman was suspended from practicing law earlier this year by the California State Bar. He will serve his sentence at a federal prison to be determined. His conduct was particularly troubling because he is a lawyer.

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