Kenneth A. Dachman Sentenced to 10 Years in Prison and Ordered to Pay Over $4 Million in Restitution
The Securities and Exchange Commission (SEC) announced that on January 17, 2013, in a criminal action brought by the U.S. Attorney’s Office for the Northern District of Illinois, the Honorable James B. Zagel in the Northern District of Illinois sentenced Kenneth A. Dachman (Dachman) to 120 months in prison on 11 counts of wire fraud and ordered Dachman to pay more than $4 million in restitution to his victims. Judge Zagel also ordered Dachman to be placed on three years of supervised released following his prison sentence. [USA v. Kenneth A. Dachman, Case No. 1:11-CR-00504, USDC, N.D. Ill.].
Dachman was criminally charged for raising more than $4 million from investors for his now-defunct sleep disorder businesses, Central Sleep Diagnostics, LLC and Advanced Sleep Devices, LLC, which were located in the northern suburbs of Chicago. Between June 2008 and September 2010, Dachman fraudulently obtained funds from investors by misrepresenting the use of investor funds, the expected investment returns and risks involved in the investments, his business and academic background and the financial condition of his companies. The government established that Dachman misappropriated more than $2 million of commingled investor funds which he used for the benefit of himself and his family.
In February 2012, the SEC filed a civil injunctive action against Dachman based on the same events. The SEC’s action has been stayed pending the outcome of the criminal case. [SEC v. Kenneth A. Dachman, et al., Case No. 12-CV-00821, USDC, N.D.Ill.]
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