An irreverent Wall Street Blog
by Bill Singer
by Bill Singer
Tax Lawyer Headed For Prison In South African Scam
June 5, 2013
Armed with a law degree from Regent University Law School and an LL.M in tax from the Georgetown University Law Center, Brian Ray Dinning embarked upon a career as a tax attorney in Suffolk, Virginia. For whatever reason, Dinning lost his way and became more outlaw than lawyer.
The For-Profit Spiel
From early 2005 through 2012, Dinning allegedly recruited approximately 23 individuals to invest in "for-profit" corporations that he had established. In pitching his investors, Dinning touted the anticipated significant financial gains from South African projects, such as luxury ocean-side housing development, hotel, and club; and he also referenced diamond and gold mining operations.
The Not-For-Profit Spiel
In addition to his for-profit ventures, Dinning also used "not-for-profit" corporations to obtain donations purportedly for charitable, environmental, agricultural medical and community projects for the tribal people of South Africa, as well as developing wildlife habitats for native African species.
Tripped Up By Trips
Dinning travelled with investors to South Africa for the purpose of evaluating investments. Frankly, these trips were ill-considered because during the visits some investors realized that they had been swindled. Upon returning home, some of those unhappy folks demanded repayment of their investment and others sued Dinning.
The Haul
Dinning's limited liability corporations received over $2.5 million in investments. Unfortunately, whether you came to Dinning via his profit or non-profit pipelines, the end result was consistent: Your money went to his personal and family uses, among which were personal expenses, alimony, child support, tuition, and real estate investments. And, of course, there were those Ponzi-like payments to former investors who had become disgruntled. As the noose tightened , Dinning lost some lawsuits, settled others, and, along the way, lost his Suffolk home.
Another Trip
In early 2012, Dinning became aware of that he was under federal investigation and in May 2012, he and his Canadian wife fled the United States and went to Toronto, Canada.
Banking On It
Then there was a whole other mess. In late 2005, Dinning purchased a 2005 Mercedes ML 500 and, thereafter, obtained a $40,000 auto loan from Village Bank of Midlothian. Once in possession of the bank loan, Dinning filed for a new Virginia title that showed no liens on the car. In May 2006, Dinning sold the car to his father in Pennsylvania for $26,000 - however, the pair prepared an affidavit describing the transaction as a "gift."
In May 2006, Dinning applied for a $828,000 home mortgage with Village Bank of Midlothian pursuant to a fraudulent application claiming $250,000 in income -- except he conveniently forget to disclose that his former employer, Trident Inc., in Northern Virginia, had fired him in January 2006. Among the supporting loan documentation that Dinning submitted were falsified 2004 and 2005 tax returns. For good measure, Dinning misled the bank regarding his alimony and child support obligations.
As a result of issuing the loans in reliance of Dinning's fraudulent representation, Village Bank lost about $223,000 on the two loans.
Indicted
On June 6, 2012, Dinning was indicted in the Eastern District of Virginia on 25 counts of wire fraud pertaining to the investment and charity frauds, and faced a maximum sentence of 20 years in prison
In September 2012, Dining was indicted for defrauding Village Bank of Midlothian in 2005 and 2006.
Bringing It All Home
On December 20, 2012, Dinning was extradited to the U.S. from Canada.
On June 3, 2013, Dinning pleaded guilty to one count of wire fraud and one count of bank fraud. He faces a maximum penalty of 30 years on the bank fraud charges and 20 years on the wire fraud.