The Maryland attorney general's office will recommend three years in prison for Monica L. Coleman, the Baltimore financier who bilked her clients out of millions of dollars and saw her dreams of a brokerage house for the city's elite end in bankruptcy and a criminal conviction.
Coleman agreed to a plea bargain under which the attorney general's office will recommend an overall sentence of 15 years - with all but three years suspended.
"We hope this sends a message that this is a crime - that this is just as serious a crime as if someone robbed a bank," Maryland Attorney General J. Joseph Curran Jr. said yesterday.
Coleman's sentencing is scheduled for Sept. 11 before Baltimore City Circuit Judge Roger W. Brown. At that time, Coleman's attorneys will have the chance to argue for an even shorter sentence.
"I think this is a very appropriate resolution," said Robert H. Waldman, one of the attorneys representing Coleman. "It allows her to make the amends that need to be made."
Coleman, 45, pleaded guilty Tuesday to five counts of securities fraud and one count of misappropriation by a fiduciary. The two parties reached the plea agreement just as the ex-broker was set to begin trial on a much longer list of charges, including felony theft.
Each of the five securities fraud charges carried a maximum sentence of three years and a $50,000 fine. The charge of misappropriation carried a maximum sentence of five years.
Each of the 15 counts of felony theft carried a maximum penalty of 15 years in prison, with a $1,000 fine.
Eileen McInerney, the assistant attorney general prosecuting the case, said her office was "very pleased" with the plea agreement.
Coleman remains free on personal recognizance pending sentencing. Her attorney said Coleman is holding down a "sales" job, though he would neither name the employer nor say how much money she makes.
Waldman said Coleman has already started making restitution and would continue to do so after sentencing.
"She is employed," Waldman said. "She will do her best to pay people back."
In January, Coleman's former attorney said in court that she had a job as a lobbyist at Public Sector Consulting Group LLC, a Baltimore-based marketing and lobbying firm, and was paid an annual salary of $120,000.
In this criminal case - which is separate from the Coleman Craten LLC bankruptcy case - Maryland prosecutors alleged that Coleman took a total of $2.6 million from five clients between early June 1997 and mid-April 1999, and either used the money for herself or funneled it into her business, Coleman Craten
The firm, formed quietly in February 1998, made a big splash when it opened late that year.
With such amenities as soft leather chairs, rich carpeting, restored woodwork, tuxedo-clad doormen, billiard tables and a library stuffed with thousands of financial reports, Coleman Craten was conceived to serve Baltimore's wealthiest investors as a brokerage house and a financial club.
Coleman, who previously worked at Legg Mason Inc., is a Baltimore native who graduated from the Johns Hopkins University and the University of Maryland Law School. She was Coleman Craten's managing partner; her partner was John G. Craten, who had joined her from Legg Mason.
Coleman had a grand vision for her firm. Plans were for Coleman Craten to hire 400 people, among them 120 financial advisers and stockbrokers who would always be present to serve the club's members.
Subsequent events underscored how determined she was to make her vision a reality.
The lawsuits started in early 1999.
That March, Shahid and Jean Aziz of Columbia alleged that the firm was little more than a Ponzi scheme and demanded that Coleman Craten return their $765,000 investment - along with promised interest of $640,000. Similar suits followed.
Then in April, discount brokerage giant Charles Schwab & Co. accused Coleman Craten of drawing funds against a worthless check. At that point, Coleman's partner Craten left and ordered that his name be removed from the company's title.
Craten could not be reached for comment yesterday.
The next month - May 1999 - would prove to be a chess match between Coleman and the regulatory and legal authorities who wanted her ousted and Coleman Craten shut down.
On May 7, a Baltimore circuit judge appointed a receiver to take control of Coleman Craten's affairs after James and Carol Hyde of Towson accused Coleman of embezzling $2 million of their retirement money. That same day, Coleman filed for Chapter 7 bankruptcy protection, a move that fended off a scheduled foreclosure on some of her personal real estate.
On May 11, after alleging that the company and Coleman had committed fraud and violated state securities regulations, the Maryland securities commissioner ordered Coleman and her brokerage firm to stop selling securities and cease advising clients.
Coleman Craten filed for Chapter 11 bankruptcy that day, a maneuver that ousted the court-appointed receiver and put Coleman back in control of the remaining assets.
But any victories by Coleman were fleeting. In December, the Maryland attorney general's office began its investigation of Coleman, and the state Securities Division revoked her stockbroker's license and permanently barred her from the securities industry. She later settled that charge, without admitting she had violated state securities regulations.
On Jan. 3, 2001, Coleman was indicted on 15 counts of felony theft, misappropriation by a fiduciary and securities fraud. She was arraigned that April and pleaded not guilty. But the trial was postponed three times before this week's plea agreement.
As for the Coleman Craten: It never reopened after the bankruptcy filing, and Coleman was again replaced by a trustee.
Curran, the attorney general, said, "We had a strong case. It feels good to get this behind us."