A former tax attorney convicted of operating a $2.5 million South African Ponzi scheme was sentenced to serve over twelve years in federal prison. Brian Ray Dinning, 48, of Suffolk, Virginia, received the sentence from U.S. District Judge Raymond A. Jackson after previously pleading guilty to two counts of wire fraud. Notably, while prosecutors sought a seven-year sentence for Dinning, Judge Jackson nearly doubled the recommended sentence and cited Dinning's decision to flee to Canada after his indictment and the subsequent use of his blog to taunt his victims. Dinning was also ordered to pay $2.3 million in restitution.
Dinning began raising money in 2005 for Hole in the Wall, which purported to make a series of charitable and profitable projects in South Africa. Potential investors were told of Dinning's ventures that could result in a sizeable financial gain, including a luxury housing development, a luxury hotel and private residence club, and gold and diamond mining operations. Dinning also solicited donations for charitable operations, including the construction of a church and providing aid to orphans. In total, Dinning raised more than $2 million from at least 20 victims.
However, Dinning did not use investor funds as advertised, instead operating a classic Ponzi scheme that used investor funds to sustain a lavish lifestyle for himself and his family. This included paying the mortgage on a nearly $1 million house, private school tuition for his children, and even $10,000 monthly alimony payments. After Dinning learned he was under investigation, he fled to Toronto, Canada, where he maintained his innocence through various blog postings attributed to him. He was arrested in August 2012, extradited back to the U.S., and held without bond based on his proclivity to flee.
For more news and analysis of Ponzi schemes, visit Ponzitracker, a blog by Jordan Maglich, an attorney at Wiand Guerra King P.L.
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