Ex-Kitsap lawyer gets 18 months for scamming friend in scheme involving arms dealer
Kitsap County attorney accused of stealing $500,000 from client’s estate destined for St. Jude Children’s Research Hospital so she could lend money to alleged arms dealer in Paraguay — then of stealing $500,000 from a friend to cover the first robbery — was sentenced Friday to 18 months in federal prison.
Darlene Piper, 57, of South Kitsap, pleaded guilty in US District Court in Tacoma to one count of wire fraud for the scheme. She first apologized to the court and then to the friend she betrayed, Tina Chapman.
“I have to say, this is absolutely insane,” Piper said in a moving statement to Judge Robert Bryan.
Before federal prosecutors took up the case and charged Piper criminally, Chapman had to pay legal fees to sue Piper and win, but she said she didn’t receive any money from the judgment. .
The experience shook Chapman’s faith in the American legal system, which, as an immigrant from Vietnam, she had fully believed in before the ordeal.
“I thought we were close friends,” Chapman told Judge Bryan about his relationship with Piper. “I trusted her, I confided in her, I respected her opinion and her advice, I considered her as a sister.”
The $500,000 she gave Piper, for what she was led to believe was an investment, was in part for a lifetime of work — often six or seven days a week — after Chapman’s house was sold. at Bainbridge Island.
When Chapman grew suspicious of Piper and demanded her money and threatened to sue, Chapman said that Piper threatened her in return.
“She told me I wouldn’t get anything if I sued her,” Chapman said. “She said I’d be broke, and I’m almost broke.”
The scheme began in February 2013 when Piper had to manage the will of her recently deceased client, Jack Yates, who bequeathed his estate of approximately $500,000 to St. Jude’s. The hospital, founded in 1962 by artist Danny Thomas, is based in Memphis, Tennessee, and provides free health care to children with serious and genetic conditions.
Instead, Piper took the $500,000 intended for the hospital, plus about $300,000 of other funds for a total of about $800,000, to make her own investment.
“The funds transferred by wire transfer were intended for a loan to Ever Marengo, an arms dealer in Paraguay,” according to a misconduct statement filed by the Washington State Bar Association.
Piper intended to pocket the interest on the loan and she received about $92,000, but in July 2015 Marengo stopped paying the interest, according to court documents.
Authorities said that in order to fulfill Yates’ charitable donation to St. Jude, which the hospital was waiting for, Piper tricked her friend, Chapman, into investing $500,000 in what Piper said was a Paraguayan bond. Instead, in October 2015, Piper used Chapman’s money to pay for Yates’ donation to the hospital.
Piper practiced law for 20 years but voluntarily quit in 2014. To avoid Bar Association discipline for the scheme involving Yates, St. Jude’s and Chapman, she resigned her license in January 2020.
Piper’s attorney, Colin Fieman, told Judge Bryan that by pleading guilty to the wire fraud charge, Piper was taking responsibility after years of battling undiagnosed bipolar disorder, schizophrenia and PTSD .
Despite the obstacles she faced, Fieman said Piper managed to achieve a high level of success until her mental illnesses and childhood trauma caught up with her.
“She wasn’t equipped to deal with the chaos of her inner life,” Fieman said. Around 2013 or 2014, Fieman said Piper’s life began to fall apart and only began to mend when she began treatment following her criminal charges. “What happened in the meantime is this terrible offence.”
Michael Dion, an assistant U.S. attorney handling the case, told Judge Bryan he was unconvinced.
“Her struggles do not completely excuse or explain her actions,” Dion said, claiming that Piper continues to mislead the court about her assets, particularly in regards to owning a condo in Mexico.
Although the process Chapman went through to try to get her money back left her damaged, Dion praised her for never shy away from trying to hold Piper accountable.
“He was the wrong victim to face,” Dion said of Chapman. “She fought this case like a lion.”
In an emotional statement to Bryan, Chapman said the loss she suffered was worse than financial,
“She not only stole my money, she stole my zest for life,” Chapman said.
In her statement to Bryan and Chapman, Piper said she had memory lapses in 2014 and 2015 and addressed Chapman directly, saying, “I completely apologize. You were a good friend to me.
Bryan ordered Piper to repay Chapman the $500,000 “investment”. Furthermore, he said Piper’s misconduct cast a negative light on all lawyers and that she had become a “thief and a swindler”.
Bryan then gave Piper a few words of encouragement, saying she had overcome a lot in her life and could overcome this.
“It’s a tough situation for you, I understand, but it’s something you can go through and overcome after you meet the court-ordered requirements,” Bryan said.