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Former Nixon Peabody partner, David Tamman, has been indicted by a federal grand jury in Los Angeles. The indictment is for ten counts for being involved in aiding a former client cover a securities fraud scheme that totaled over $20 million. A press released from the United States Attorney’s Office for the Central District of California said that the charges against Tamman include obstruction of justice, conspiracy, and the alteration of records. The release also said that if convicted on all counts, Tamman would face a maximum sentence of 190 years in federal prison, according to the AmLaw Daily.
John Farahi, the client at the heart of the scheme, was also indicted by the same federal grand jury. He was indicted on 41 criminal counts. Those counts include mail fraud, loan fraud, aggravated identity theft and many more.
Farahi was able to defraud investors by making promises their money was being put toward the purchase of corporate bonds. He told clients those bonds were backed by the federal bank bailout program known as the Troubled Asset Relief Program. Farahi instead used the money to improve his Ponzi scheme and support the lavish lifestyle of his family.
Farahi’s company was investigated by the Securities and Exchange Commission, beginning in April of 2009. The company was named New Point Financial Services. When the investigation began, Farahi and Tamman attempted to hide the fraud scheme. In an effort to hide the scheme, documents were backdated and the removal of incriminating documents from client files before those files were submitted to the SEC. They were also charged with lying to SEC officials in a sworn testimony.
Tamman has already lost two jobs because of the alleged offenses and the SEC probe. Tamman was terminated by Nixon Peabody back in October of 2009 when “we learned that he was under SEC investigation and he failed to explain his actions to us,” as told to AmLaw Daily.
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Nixon Peabody was sued by Tamman in October because he claims the company made him a scapegoat in the issue, taking almost $1.5 million of his business away from him. The lawsuit also claims that the company made it a point to pin the issue on him instead of their company.
Tamman previously worked at Liner, Grode, Stein, Yankelevitz, Sunshine, Regenstreif & Taylor. Tamman took New Point with him from his former employer to Nixon. There were quite a few other Nixon lawyers who also handled the Nixon account, as alleged in the Tamman lawsuit against Nixon. A response has yet to be filed by Nixon in response to the lawsuit.
Greenberg Traurig hired Tamman after he was relieved by Nixon Peabody, but that firm let him go in January when it found out about his alleged problems.
