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United States v. Dalmy

United States District Court, D. Connecticut

November 6, 2018

UNITED STATES OF AMERICA
v.
DIANE DALMY, Defendant.

          ORDER GRANTING GOVERNMENT'S MOTION FOR RESENTENCING

          JEFFREY ALKER MEYER UNITED STATES DISTRICT JUDGE.

         The Government has moved for resentencing of defendant Diane Dalmy on the ground that she willfully failed to pay restitution. The Court will grant the Government's motion.

         Background

         Dalmy was a securities law attorney based in Colorado. For several years from 2009 to 2016, she conspired with others to defraud penny stock investors. Dalmy traded on her position as an attorney to help make the fraud succeed by writing fraudulent legal opinion letters or letting one of her co-conspirators do so in her name. Dalmy also used her attorney trust fund account to launder proceeds from the fraudulent scheme on behalf of her co-conspirators. Doc. #4 at 11-12; Doc. #16 at 1-17.

         On February 6, 2018, Dalmy pleaded guilty to a charge of conspiracy to engage in wire fraud. Doc. #3. She agreed in her plea agreement to be subject to a restitution order. Doc. #4 at 2. She also agreed that “[r]estitution is payable immediately unless otherwise ordered by the Court.” Id. When the Court accepted her plea, she was told that restitution would be mandatory and that the Government might seek restitution of more than $10 million. Doc. #10 at 15, 21.

         At the conclusion of the plea proceeding, the Court emphasized the importance to Dalmy of her promptly making restitution payments in advance of sentencing. Doc. #10 at 37. The Court told her that “[r]estitution is an important concern in my mind, especially with victims who have lost, it seems to me, quite a bit of money in the overall scheme.” Ibid. She replied: “Absolutely.” Ibid. The Court added that “I really expect by the time of sentencing that there's either actually a beginning of payment, of sacrifices of restitution being made, o[r] being set aside, or an extremely clear payment plan” and that “[w]ords don't mean as much to me, I have to say, when we have people who have lost money and through an investment scheme.” Ibid.

         Prior to sentencing, Dalmy completed a sworn financial affidavit. Doc. #13-4. In response to a query on the affidavit whether she had any “cash on hand, ” Dalmy said, “None.” Id. at 5.

         On May 15, 2018, Dalmy appeared before the Court for sentencing. During the sentencing hearing, she claimed to take “full responsibility for the actions I took” while also claiming that she “had no idea of the impact on investors.” Doc. #23 at 44-45. She added that she “intend[ed] to write each and every one of these investors a letter, a card, saying I am so sorry, and then do whatever I can to make restitution and to make their lives whole, because I understand that some lives have been drastically impacted by this.” Id. at 45 (emphasis added).

         The Court sentenced Dalmy principally to a term of 3 years of imprisonment, to be followed by 3 years of supervised release. Id. at 86-87. The Court also ordered Dalmy to pay restitution of $2 million. Id. at 87. This amount was significantly less than the actual financial loss attributable to Dalmy's fraudulent scheme (about $10.7 million) and significantly less than the amount of restitution requested by the Government (about $3.3 million). Doc. #16 at 17-21.

         As to the timing for payment of restitution, the Court stated at the sentencing hearing that the “amount of restitution is due and payable immediately.” Doc. #23 at 87. In addition, as part of her conditions of supervised release that would begin after service of her term of imprisonment, the Court required that Dalmy pay restitution in the amount of $500 per month or 10 percent of her gross income, whichever amount was higher. Id. at 88.

         Following the sentencing hearing, the Court entered a judgment order including $2 million in restitution:

Restitution: $2, 000, 000.00 to be joint and several with respect to the related defendants. See special conditions of supervised release as to restitution. Restitution order to follow.

         Doc. #21 at 2.

         The judgment order further specified the terms of Dalmy's supervised release following her imprisonment, including among other conditions her obligations during ...


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