Northbrook sleep clinic owner pleads guilty to wire fraud
Updated: October 24, 2012 10:02PM
The owner of a now-defunct Northbrook sleep clinic pleaded guilty to wire fraud for a plot in which he misappropriated as much as $2 million in investor funds, including money to open a tattoo parlor for his son-in-law, according to federal prosecutors.
Kenneth A. Dachman, 54, of Glencoe, former CEO of Central Sleep Diagnostics in Northbrook, was indicted in August 2011 for fraudulently obtaining about $4 million from more than 50 investors.
Dachman pleaded guilty to each of the 11 counts of wire fraud, according to U.S. Attorney’s office spokesman Randall Samborn. In the written plea agreement read in federal court, however, he admits to taking only $700,000.
Wilmette attorney Jim Koch, who won the civil case, said that only $100,000 has surfaced.
Dachman faces up to 20 years in federal prison when he is sentenced on Dec. 13. He also faces fines up to $250,000 and must pay restitution.
Dachman operated Central Sleep Diagnostics, 60 Revere Drive in Northbrook, which purportedly treated sleep apnea and sleep-related illnesses through diagnostic studies in a patient’s homes; Advanced Sleep Devices, which claimed to sell equipment to treat sleep disorders; and Key Partners, which handled marketing for both businesses, the indictment stated.
The indictment alleged that he then misappropriated at least $2 million of comingled investor and company funds to benefit himself and his family.
Instead of using the money to operate the sleep clinic, Dachman used a significant amount to buy a two-acre mansion in Lake Forest; to operate a now-defunct tattoo parlor in Chicago co-owned by his son-in-law; and to buy a new Range Rover, rare books and antiques, vacations and cruises to Italy, Nevada, Florida and Alaska for himself and his family, among other expenses.
After being indicted in August 2011, Dachman was ordered held in contempt in December 2011 after authorities caught him trying to sell some of the rare books for cash, and lying about other funds in his accounts, according to prosecutors.
Dachman tried to sell the books after telling the court he no longer owned them, and when the judge asked about other funds, Dachman said he had none. However, just after the hearing, he tried to collect about $13,000 from his security funds, according to prosecutors.
Dachman has been sued four dozen times over the years in fraud cases, and convicted in 1999 of deceptive practices, after allegedly cheating mortgage-seeking clients out of their fees.
Pioneer Press Reporter Irv Leavitt contributed to this story.