Chapman found guilty of fraud

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BALTIMORE -- A federal jury yesterday found a former money manager guilty of defrauding the state retirement system, ending a trial in which attorneys often focused on the manager's political relationship with former Gov. Parris N. Glendening.

Nathan Chapman Jr., 46, was found guilty on 23 fraud counts, including ripping off his own companies by using "business development" checks, partly to pay for extramarital affairs. Prosecutors accused Chapman of looting more than $500,000, but jurors did not reach a unanimous decision on the amount.

Chapman was charged in a sweeping, 32-count indictment with mail fraud, wire fraud, securities fraud and other crimes relating to his use of state retirement system funds to revive the stock price of his sagging company.

The $29 billion retirement system, which is responsible for the pensions of more than 250,000 teachers, police officers, firefighters and other government workers, lost nearly $5 million in the transactions.

"He did it because he could. He did it because he didn't think anybody would stop him," U.S. Attorney Thomas DiBiagio said outside the downtown Baltimore federal courthouse. "He was wrong. And today the jury told him he was wrong."

A jury of five women and seven men deliberated for six full days before delivering the verdict to U.S. District Judge William Quarles early on the seventh day.

The jury found Chapman guilty on 15 counts of wire fraud, two counts of mail fraud, three counts of investment advisory fraud, one count of making false statements to the Securities and Exchange Commission, and two counts of making false statements on tax returns.

They acquitted Chapman on two wire fraud counts, four mail fraud counts and one count of making false statements on tax returns. They couldn't reach a decision on two other counts of making false statements on tax returns.

The maximum penalties for each of the counts of mail fraud, wire fraud, investment adviser fraud, and making a false statement to a government agency are five years imprisonment and a $250,000 fine. The maximum penalties for each count of making false statements on tax returns are three years imprisonment and a $100,000 fine.

Chapman, who declined to comment as he left the courthouse, will remain free until his Nov. 1 sentencing.