Plea Entered in Securities Fraud Case With Suffield Ties

SUFFIELD, CT — A lawyer has entered a plea in a securities fraud case with Suffield ties.

John H, Durham, United States attorney for the District of Connecticut, announced on Tuesday that Diane Dalmy, 63, of Denver, CO, waived her right to be indicted and pleaded guilty before U.S. District Judge Jeffrey A. Meyer in New Haven to one count of conspiracy stemming from her role in a securities fraud scheme.

According to court documents and statements made in court, Dalmy, a lawyer, undertook securities-related legal work on behalf of several public companies, including Mammoth Energy Group, Inc., a company that later became known as Strategic Asset Leasing Inc.; and Fox Petroleum, Inc.

Between approximately January 2009 and July 2016, Dalmy conspired with others, including William Lieberman, of Boca Raton, FL and Christian Meissenn, of Suffield, to defraud investors through a stock “pump and dump” scheme, Durham said.

During the course of the conspiracy, Dalmy acted largely at Lieberman’s direction, Durham said.

As part of the scheme, Lieberman, Meissenn and others induced investors to purchase securities by making false and misleading representations in calls, e-mails and press releases concerning the securities and the issuing companies, thereby causing the price of those securities to become falsely inflated, Durham said.

The issuing companies, which were essentially shell companies with virtually no legitimate business activities, were controlled by Lieberman and others, Durham said. 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, he said.

They then ended the promotion and allowed the share price to plummet, leaving investors holding worthless and unsalable stock and as a result, investors lost millions of dollars, he said.

Dalmy participated in the conspiracy by writing, and permitting Lieberman to write in her name, fraudulent opinion letters that were used to "un-restrict" 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), Durham said.

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, Durham said.

Dalmy also ghost-wrote similarly fraudulent opinion letters for the Subject Companies in another Colorado attorney’s name and permitted Lieberman to do so, Durham said. They included “adequacy” letters that were posted on a website maintained by an electronic securities marketplace, Durham said.

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.

At times, Dalmy provided the co-conspirators with capital by advancing money from her Lawyer Trust Account, Durham said. The funds belonged to other clients of Dalmy’s law practice who did not know that their funds had been advanced to the co-conspirators by Dalmy, Durham said.

Finally, between February 2015 and July 2016, Dalmy laundered a portion of the proceeds of the scheme on behalf of the co-conspirators, Durham said.

Dalmy helped Lieberman to incorporate and open bank accounts for a private company, Queen Asia Pacific Ltd., which was controlled by Lieberman, Durham said.

These bank accounts were used to receive proceeds of the scheme from a brokerage account in Queen Asia’s name. 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, Durham said.

In total, Dalmy laundered approximately $825,000 on behalf of the co-conspirators through Queen Asia’s bank accounts and her IOLTA.

Dalmy’s total gain from her participation in the conspiracy, and related legal work for the subject companies, was approximately $30,000, Durham said.

Judge Meyer scheduled sentencing for May 2. Dalmy faces a maximum term of imprisonment of five years. Dalmy is released on a $100,000 bond pending sentenced.

Lieberman, Meissenn and four other individuals have pleaded guilty to various offenses stemming from this scheme and are awaiting sentencing.

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