Lawyer Sentenced to 10 Years for Money Laundering
|U.S. Attorney’s Office April 02, 2014|
SACRAMENTO, CA—Derian Eidson, 50, of Yorba Linda, California, a suspended member of the California bar, was sentenced today by United States District Judge Troy L. Nunley to 121 months of imprisonment and a fine of $200,000, following conviction at trial on two counts of money laundering, United States Attorney Benjamin B. Wagner announced.
The court found that Eidson “betrayed the trust that she took when she swore to uphold the laws of the state of California and the United States.” According to evidence presented at the trial, Eidson was an insurance defense lawyer in 2001 when she met Steven Zinnel, a Sacramento businessman. The two began a romantic relationship and also a near-decade-long relationship transacting in assets that Zinnel had illegally concealed during his child support litigation and personal bankruptcy. Trial testimony established that Zinnel’s motivation was to hide assets from his ex-wife and children; Eidson’s motivation was identified by the court as “greed.” In the course of the scheme, Eidson used her attorney client trust account to conceal funds.
“Attorneys who misuse their position to perpetrate financial crimes debase the profession and are particularly deserving of prosecution and imprisonment,” said U.S. Attorney Wagner. “Practicing law is a privilege; it is not a license to steal and conceal.”
“Fraud and dishonesty in bankruptcy proceedings undermines the integrity of these important proceedings,” said Jose M. Martinez, IRS-Criminal Investigation Special Agent in Charge. “The defendant in this case was an attorney, who used her legal knowledge to defraud the bankruptcy court and launder the proceeds of that crime. Today’s sentence reflects the seriousness of the crimes, promotes respect for the law and provides just punishment.”
Together with Zinnel, Eidson established a shell company, Done Deal, for the purpose of receiving distributions from Zinnel’s silent partnership an electrical infrastructure company. Keeping Done Deal and the Done Deal bank account in Eidson’s name allowed Zinnel to conceal his ownership interest in the company from the bankruptcy court and family court. Once Zinnel’s debts were discharged, both Zinnel and Eidson used the Done Deal, according to the court, as “an ATM.”
The court pointed out the many opportunities that Eidson had to abandon the scheme and advise Zinnel of the illegality of his actions. Judge Nunley also rejected arguments Eidson made for leniency on the basis that she had already lost her law practice and that her network of “law-abiding” friends and loved ones would make her less likely to reoffend. Instead, the court found that these factors only served to highlight Eidson’s culpability, stating that while some defendants without such advantages commit crimes out of desperation, Edison’s offense “wasn’t a crime of desperation. This was a crime of greed.”
Zinnel was sentenced to 212 months’ imprisonment for his role in the offense on March 4, 2014.
This case is the product of an investigation by the FBI and IRS-Criminal Investigation. Assistant United States Attorneys Matthew D. Segal, Audrey B. Hemesath, and Kevin Khasigian prosecuted the case.