On Monday, United States Attorney for the District of Connecticut, Deirdre M. Daly, and Special Agent, Patricia M. Ferrick, announced that a Connecticut real estate developer had waived his right to be indicted and pleaded guilty to wire fraud. 74-year-old John DiMenna of Vero Beach, Florida pleaded guilty to two counts of wire fraud in connection with a real estate investment and financing scheme.
Court documents and statements made in court show that DiMenna worked in the commercial real estate industry. He was responsible for the management and development of commercial real estate projects in Fairfield County. He managed hotels and multi-tenant properties.
DiMenna and his partners operated several entities, including Seaboard Realty LLC, Seaboard Properties Group LLC, and Seaboard Stamford Investment Group. To raise capital for projects, DiMenna and his partners sold membership interests to investors in each LLC. The defendant also sold interest in other LLCs, which did not own specific properties, but did have some involvement in certain projects.
Several financial institutions and other entities provided DiMenna with millions of dollars for the purchase, renovation and construction of commercial real estate projects. DiMenna was responsible for overseeing each project, including each entity’s profitability, cash flows, cash needs, and additional funds needed.
DiMenna pleaded guilty to engaging in a scheme to defraud investors and financial institutions from 2010 to March 2016. Despite knowing that some of his properties were not cash positive, DiMenna never told investors and lenders. Instead, he used funds from positive entities to support other LLCs that were in need of funds.
DiMenna also utilized funds from positive LLCs to make interest and return payments to investors. The defendant also used spreadsheets with inflated projected cash flows and inaccurate financial information to support the scheme. At times, the defendant sold investors equity in some entities when he knew those entities were fully subscribed and not eligible for investment monies.
The government alleges that DiMenna’s scheme caused investors to lose roughly $28 million. It is also alleged that victim lenders lost around $41 million for a total combined loss of $69,617,685.38. At this point in time, DiMenna is free on a $250,000 bond.
DiMenna will be sentenced by United States District Judge Victor A. Bolden at a later date. He faces a maximum sentence of 50 years in prison.