Former Attorney Pleads Guilty to Bank Fraud and to Defrauding Investors in South African Scheme
|U.S. Attorney’s Office June 03, 2013|
NORFOLK, VA—Brian Ray Dinning, formerly of Suffolk, Virginia, pleaded guilty today to one count of wire fraud and one count of bank fraud.
Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after the plea was accepted by United States District Judge Raymond A. Jackson.
Dinning faces a maximum penalty of 30 years on the bank fraud charges and 20 years on the wire fraud charges when he is sentenced on October 2, 2013.
Dinning was a tax attorney in Suffolk, Virginia. Dinning’s scheme to defraud involved South African investment opportunities, including land developments, gold and diamond mining operations, and alleged charitable work for the South African tribes. Dinning orchestrated his scheme by soliciting local businessmen who were interested in investing in South Africa, either for charity or return on investments. Dinning promised his investors guaranteed returns on their investments.
Between 2005 and 2012, Dinning received over $2.5 million in investments and charitable donations to his numerous limited liability corporations (LLCs). Dinning’s bank records reveal that shortly after the investment checks and wires were deposited into one of his LLC bank accounts, Dinning would immediately use the money to pay for personal expenses, such as a down-payment and subsequent mortgage payments on his new home; alimony/child support payments to his ex-wife; payments for credit cards balances; payments to disgruntled former investors; and payments to his wife and family members. Dinning would periodically travel with his investors to South Africa to evaluate their investments. As a result of these trips, several investors realized they had been defrauded and either asked for a return of their investment and/or filed lawsuits against Dinning. Dinning eventually left the area after losing or settling several lawsuits, as well as losing his home in Suffolk. Nevertheless, Dinning continued to recruit other victims in Maryland, Pennsylvania, Canada, and Europe.
In early 2012, Dinning became aware of the federal investigation concerning his projects, and in May 2012, the defendant fled the United States and went to Toronto, Canada, with his Canadian spouse. Dinning was indicted in June 2012 on 25 counts of wire fraud.
Dinning was indicted in September 2012 for defrauding Village Bank of Midlothian in 2005 and 2006. In late 2005, Dinning purchased a 2005 Mercedes ML 500 and then obtained a $40,000 auto loan from Village Bank. He filed for a new Virginia title that showed no liens on the car. In May 2006, the defendant sold the car to his father in Pennsylvania for $26,000. Dinning and his father showed this transaction as a gift, with the father and Dinning writing an affidavit of gift. In May 2006, the defendant applied for a home mortgage of $828,000 with Village Bank. Dinning falsified his mortgage application claiming $250,000 in income (he had been fired by his former employer, Trident Inc., in Northern Virginia, in January 2006); he provided the bank falsified 2004 and 2005 tax returns; and misled the bank regarding his alimony or child support. Village Bank’s losses were approximately $223,000 on the two loans.
Dinning eventually was extradited from Canada on December 20, 2012, and was held for pretrial detention pending trial. This case was investigated by the Federal Bureau of Investigation. Assistant United States Attorneys Stephen W. Haynie and Elizabeth M. Yusi are prosecuting the case on behalf of the United States.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Eastern District of Virginia at http://www.justice.gov/usao/vae.