Northbrook businessman gets 10 years for fraud
Updated: February 25, 2013 6:19AM
NORTHBROOK — A Glencoe man who ran a now-defunct sleep-disorder business in Northbrook was sentenced Thursday to 10 years in federal prison for fraudulently obtaining more than $4 million from 51 investors.
Kenneth A. Dachman pleaded guilty in October to 11 counts of wire fraud, according to Randall Samborn, spokesman for the U.S. Attorney’s Office in Chicago.
“His business was not sleep apnea but putting money in his pocket,” U.S. District Judge James Zagel said in announcing the sentence.
Randall said federal prosecutors showed Dachman used at least $2 million of funds from investors and the companies to benefit himself and his family.
Dachman, 52, of Glencoe and formerly of Lake Forest, was ordered to pay restitution and forfeiture totaling more than $4 million by U.S. District Judge James Zagel. Dachman also was sentenced to three years of supervised release after his release.
A hearing was set for Jan. 30 to decide when Dachman will begin serving his sentence.
Dachman operated Central Sleep Diagnostics LLC, which was supposed to treat sleep apnea and sleep-related illnesses by conducting diagnostic studies in a patient’s home instead of a hospital or a clinic, and Advanced Sleep Devices LLC, which purported to sell equipment used to treat sleep disorders to patients.
He also operated Key Partners LLC to handle marketing for both businesses.
Between June 2008 and September 2010, Dachman misrepresented to investors what the money would be used for, the expected return on and risks involved in investments, his business background, the financial condition of Central Sleep and Advanced Sleep and the status of investments, Samborn said.
Instead of using the money to operate the businesses, Dachman used a significant amount of the investors’ funds to buy a two-acre mansion in Lake Forest; operate a tattoo parlor in Chicago co-owned by his son-in-law; pay for vacations and cruises for himself and his family to Italy, Nevada, Florida and Alaska; buy a sport utility vehicle; fund personal gambling in Las Vegas and stock trading; and to buy rare books and antiques.