Wednesday, November 14, 2012
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Lawyer Convicted of Altering Documents, Other Federal Felonies
By a MetNews Staff Writer
Santa Monica attorney David Tamman was convicted in U.S. District Court yesterday of all 10 counts in connection with obstructing a Securities and Exchange Commission investigation into whether one of his law firm’s former clients was running a Ponzi scheme.
He was then a securities partner at Nixon Peabody LLP.
Following a two-week bench trial, Tamman was found guilty by Judge Philip Gutierrez of the Central District of California of one count of conspiring to obstruct justice, five counts of altering documents, one count of being an accessory after the fact to his client’s mail and securities fraud crimes, and three counts of aiding and abetting the client’s false testimony before the SEC.
The client, John Farahi, in June pled guilty to running a Ponzi scheme, selling unregistered securities, bank fraud, and conspiring with Tamman to obstruct justice.
André Birotte Jr., United States attorney for the district, said in a press statement:
“A case like this reveals the lengths to which those committing frauds will go to conceal their criminal deeds. It also demonstrates that we will go to equal lengths to overcome these efforts at concealment and cast a bright light on fraudulent schemes that threaten investors and others in today’s difficult financial environment.”
The evidence adduced at trial showed that on the heels of an SEC made a surprise inspection of Farahi’s business, Tamman began altering and backdating documents to create the illusion that Farahi had been disclosing to investors that Farahi was himself taking the majority of investors’ funds. It was also shown that Tamman created and backdated promissory notes.
Christy L. Romero, special inspector general for the Troubled Asset Relief Program, declared:
“Tamman created false disclosure documents and engaged in a massive cover-up which aided in hiding a multi-million dollar Ponzi scheme orchestrated by Farahi, who duped investors by falsely claiming to invest in safe, TARP-backed corporate bonds to instead bankroll his lavish lifestyle and high-risk trading which resulted in massive losses for investors and TARP banks.”
Tamman’s sentencing is scheduled for Feb. 11, 2013. He faces a maximum sentence of 190 years in prison.
Farahi’s sentencing is scheduled for Dec. 17. Under a plea agreement, he will be sentenced to no more than 10 years in prison.
Tamman in 2011 sued Nixon Peabody in Los Angeles Superior Court, contending he was “thrown under the bus” by the firm. That action was stayed in June by Judge Maureen Duffy-Lewis, pending the outcome of the federal prosecution.
Copyright 2012, Metropolitan News Company