A Santa Monica man was convicted Tuesday of hiding evidence from Securities and Exchange Commission investigators looking into a Ponzi scheme allegedly run by one of his law firm's former clients.
David Tamman, 45, was convicted on 10 counts including altering documents and conspiring to obstruct justice for helping his client, John Farahi, hide evidence that he had taken investors' money to support a lavish lifestyle.
According to a release by the Department of Justice, Tamman altered and backdated disclosure documents to dupe investors into believing their money had been put into safe, government-backed corporate bonds, said Christy Romero, special inspector general for the Troubled Asset Relief Program, or TARP.
TARP was a creation of the federal government meant to strengthen the financial industry by buying up toxic assets that loaded up banks' books after the subprime mortgage market collapsed in 2006.
The bonds referenced were backed by TARP.
"As NewPoint's lawyer, Tamman helped John Farahi violate the most basic investor protection law — that you tell investors the truth," Romero said.
Tamman and Farahi were both indicted in December 2011.
In June 2012, Farahi pleaded guilty to charges that he ran the Ponzi scheme, sold unregistered securities, committed bank fraud and conspired with Tamman to obstruct justice. His next court date is Dec. 17. He will get no more than 10 years in federal prison because of a plea bargain.
Tamman is now set to be sentenced on Feb. 11, 2013. He faces a maximum sentence of 190 years in prison.
To report suspected illicit activity involving TARP, call the SIGTARP Hotline at 1-877-SIG-2009 (1-877-744-2009).
