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Sunday, July 21, 2024 | Back issues
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Attorney’s Seven-Year Sentence Upheld

PASADENA, Calif. (CN) - The 9th Circuit on Friday affirmed an attorney's conviction and sentence for being an accessory after the fact to mail fraud and securities law violations.

David Tamman was working for John Farahi's company NewPoint Financial Services in 2003 when he began preparing documents to make it look like Farahi's private offerings of debentures were legitimate when they were not, according to the three-judge panel.

From 2005 to 2009 Farahi raised more than $30 million from the debentures, representing them as low-risk investments, and used the money for undisclosed purposes, "including payment of his own personal expenses, principal repayments to previous investors, and higher-risk futures options trading," according to the 18-page ruling.

The Securities and Exchange Commission investigated NewPoint in 2009 on a tip that Farahi was operating a Ponzi scheme, and Tamman edited backdated documents throughout the investigation, U.S. District Judge David Alan Ezra of Honolulu wrote for the circuit, sitting by designation.

In 2012 Tamman was indicted with conspiracy to obstruct justice, accessory after the fact to mail fraud and securities law violations, altering documents to influence a federal investigation and aiding and abetting Farahi's false testimony at an SEC deposition.

The district court found him guilty and sentenced him to seven years in prison.

Tamman said the court erred in calculating his sentence because it dually applied the broker-dealer and special skill enhancements of the sentencing guidelines, which to double counting.

But Ezra wrote that Tamman's rationale does not apply to his case.

"Application of both special offense characteristics is not double counting: it reflects different conduct committed by two different parties," Ezra wrote.

Tamman also argued that the district court overcalculated the loss amount and the number of victims.

He said that though the court called the loss greater than $20 million, he was aware of only $11 million, and he said that though the court said there were more than 50 victims, he was aware of only 43.

But Ezra ruled that even if Tamman were not directly aware of the court's figures, he could have "reasonably foreseen" them.

Tamman also claimed that he was under the influence of medications when he waived his right to a jury at his trial, but Ezra said that since Tamman's behavior and his attorney's representations did not indicate otherwise, the district court was right to take the waiver at face value.

Ezra also found that since Tamman's trial became a bench trial, the court was right to exclude the testimony of two expert witnesses.

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