Baltimore investment banker Nathan A. Chapman Jr. said yesterday that he is resigning from the University System of Maryland's Board of Regents to focus on his defense against federal charges that he defrauded the state pension system and his own companies.
"Now is the time for me to focus on my family, my clients, employees of my companies and, especially, in defending myself against untrue and unjust charges recently filed against me by government authorities," Chapman said in a statement.
Chapman's resignation from the board comes less than two weeks after he was accused in a 39-count federal indictment of fraudulently using state pension money to pump up the price of stock in his own business.
He pleaded not guilty to the charges Thursday in U.S. District Court in Baltimore and, with his lawyers, began a vigorous public campaign to clear his name. In the statement released late yesterday, Chapman again asserted that he would be cleared of any wrongdoing: "I am confident that when all the evidence is in, and all the facts are known, I will be found totally innocent."
Chapman's work with the Board of Regents, which oversees 13 of Maryland's public colleges and universities, was unrelated to the pending charges. But the high-profile investigation brought pressure on him to step down from the panel where he served as the youngest non-student ever appointed and the board's first black chairman.
A year ago, Chapman announced he would remain a regent but give up the chairman's post, amid increasing scrutiny of his role as money manager for the state pension fund. After Chapman's indictment, Gov. Robert L. Ehrlich Jr. stopped short of calling for Chapman's resignation, but suggested through a spokesman that Chapman should "do the right thing" and step down.
Chapman, 45, was appointed to the Board of Regents eight years ago by then-Gov. Parris N. Glendening was chairman from 1999 to last year. His term would have ended in 2005.
The last board meeting Chapman took part in was June 10, when he listened and offered comments by speaker phone. Chapman was absent from two subsequentboard meetings.
A week ago, Chapman attorney Lanny J. Davis rejected suggestions that Chapman resign from the university panel. Davis said last night that he had continued to urge Chapman to remain on the board but understood the decision.
Chapman served as an investor for the state employee pension fund from 1996 until he was fired in January of last year. The pension system serves 250,000 state workers, teachers, police officers and retirees.
Federal prosecutors say a fraudulent stock scheme devised by Chapman cost the $25 billion pension system almost $5 million. Prosecutors also have said that Chapman stole about $437,350 from his companies and spent much of the money on lavish gifts, vacations and financial support for various women.
The federal charges accuse Chapman of having an intimate relationship with former pension trustee Debra B. Humphries of Bowie who, with other trustees, was responsible for overseeing Chapman's role with the pension fund. Humphries was charged in a separate indictment with one count of perjury. Prosecutors said she failed to disclose to a federal grand jury that Chapman had given her $46,000 in money and gifts.