Former Kitsap lawyer gets 18 months for ripping off friend in scheme involving St. Jude's, arms dealer

A Kitsap County lawyer accused of stealing $500,000 from a client’s estate meant for St. Jude’s Children’s Research Hospital so she could loan money to a purported arms dealer in Paraguay — and then stealing $500,000 from a friend to cover the first theft — was sentenced Friday to 18 months in federal prison.

Darlene Piper, 57, of South Kitsap, pleaded guilty in U.S. District Court in Tacoma to a count of wire fraud for the scheme. She apologized first to the court then to the friend she betrayed, Tina Chapman.

“I have to say it is completely crazy,” Piper said in an emotional statement to Judge Robert Bryan.

Before federal prosecutors took the case and charged Piper criminally, Chapman was left to foot legal bills to sue Piper, and win, but she said she has not received any money from the judgment.

The experience left Chapman’s faith in the U.S. court system shaken, which, as an immigrant from Vietnam, she had fully believed in before the ordeal.

“I thought we were close friends,” Chapman told Judge Bryan of her relationship with Piper. “I trusted her, I confided in her, I respected her opinion and advice, I thought of her as a sister.”

The $500,000 she gave to Piper, for what she was led to believe was an investment, accounted in part for a lifetime of work – often six or seven days a week – that came after the sale of Chapman’s Bainbridge Island house.

When Chapman grew suspicious of Piper and demanded her money back and threatened to sue, Chapman said Piper threatened her right back.

“She told me I would get nothing if I sued her,” Chapman said. “She said I would be broke, and I am almost broke.”

The scheme started in February 2013 when Piper was set to handle the will of her recently deceased client, Jack Yates, who bequeathed his estate of about $500,000 to St. Jude’s. The hospital, founded in 1962 by entertainer Danny Thomas, is based in Memphis, Tennessee, and provides free health care to children who suffer from grave and genetic illnesses.

Instead, Piper took the $500,000 meant for the hospital, along with about $300,000 of other funds for a total of about $800,000, to make an investment of her own.

“The wire-transferred funds were for a loan to Ever Marengo, an arms dealer in Paraguay,” according to a statement of misconduct filed by the Washington State Bar Association.

Piper had intended to pocket the interest from the loan, and she received about $92,000, but in July 2015 Marengo stopped making interest payments, according to court documents.

Authorities said that in order to fulfill Yates’ charitable donation to St. Jude’s, which the hospital was expecting, Piper enticed her friend, Chapman, to invest $500,000 in what Piper said was a Paraguayan bond. Instead, in October 2015, Piper used Chapman’s money to pay Yates’ donation to the hospital.

Piper practiced law for 20 years but voluntarily stopped in 2014. To avoid discipline from the Bar Association 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 count of wire fraud, Piper was taking responsibility after struggling for years with undiagnosed bipolar disorder, schizophrenia and PTSD.

Despite the hurdles she faced, Fieman said Piper managed to achieve a high level of success until her mental illnesses and childhood trauma caught up to her.

“She was not equipped to manage the chaos of her inner life,” Fieman said. Around 2013 or 2014, Fieman said Piper’s life began to fall apart and didn’t start mending until she entered treatment following her criminal charges. “What happened between then is this terrible offense.”

Michael Dion, an assistant U.S. Attorney on the case, told Judge Bryan he was not convinced.

“Her struggles do not fully excuse or explain her actions,” Dion said, contending that Piper continues to deceive the court about her assets, especially regarding ownership of a condo in Mexico.

Though the process Chapman underwent to try to recover her money left her damaged, Dion commended her for never wavering in trying to hold Piper accountable.

“This was the wrong victim to take on,” 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 joy in life,” Chapman said.

In her statement to Bryan and Chapman, Piper said she has memory gaps in 2014 and 2015 and addressed Chapman directly, saying, “I apologize completely. You were a good friend to me.”

Bryan ordered Piper to pay back Chapman the $500,000 from the “investment.” Further, he said Piper’s misconduct shed a negative light on all lawyers and she had become a “thief and a crook.”

Bryan then gave Piper some words of encouragement, saying she had overcome much in her life and she could overcome this.

“This is a difficult situation for you, I understand, but it is something you can get through and get past after you fulfill the requirements placed on you by the court,” Bryan said.

This article originally appeared on Kitsap Sun: Former Kitsap lawyer gets 18 months for ripping off friend in scheme involving arms dealer