Chapman gets hit with new charges

Lies are alleged on tax and mortgage filings

Laundering count also lodged

Counsel says prosecutors `pile on' false accusations

March 04, 2004|By Gail Gibson | Gail Gibson,SUN STAFF

Federal prosecutors brought a string of new charges yesterday against well-known Baltimore money manager Nathan A. Chapman Jr., alleging that he lied on tax returns and a mortgage application and laundered proceeds from the sale last summer of his $1 million Howard County home.

Chapman, 46, was charged in June with defrauding the state pension system of nearly $5 million and stealing from his own publicly held companies to pay for gifts and travel for various women. The new indictment says Chapman took more than $518,000 in company money for his own use, about $80,000 more than originally charged.

The former chairman of the state university system's Board of Regents and close political ally of former Gov. Parris N. Glendening has said he will be cleared at trial, currently scheduled for June. Washington attorney William R. "Billy" Martin criticized the new allegations last night as piling on by authorities.

"These charges reflect another tactic by the prosecution to pile on false and malicious charges," Martin said. "There is nothing new in this superseding indictment. These allegations have been known to the government for years."

Maryland U.S. Attorney Thomas M. DiBiagio announced the new charges in a late-afternoon news release, but did not comment publicly.

The new indictment, filed in U.S. District Court in Baltimore, alleges that Chapman under-reported his income on joint tax returns filed with his wife, Valerie Chapman, between 1997 and 2001. The indictment shows that the couple's income during those years ranges from a low of $95,106 in 1997 to a high of $567,922 in 2000.

The new charges also allege that Chapman lied on a $920,000 mortgage loan application in July 1999, as he and his wife were preparing to buy their former home on Brighton Dam Road in Clarksville. The indictment says Chapman told bank officials he would cover the down payment on the home by selling stock in one of his companies, and submitted a false document confirming the sale.

Instead, the indictment said, Chapman took the down payment money directly from one of his companies. Chapman also failed to disclose that he owed more than $720,000 to his companies, listing on the loan application only his old mortgage and a $1,653 debt owed to high-end Neiman Marcus.

Federal prosecutors also brought a money-laundering charge against Chapman in connection with the sale last year of the Brighton Dam Road home, arguing that because the home was obtained through illegal activity, the profit was illegal. The home was sold in April 2003 for $1.16 million. According to the indictment, Valerie Chapman opened a Bank of America account on July 2, 2003 -- the day before her husband's original indictment -- in her name alone. Five days later, the $308,768 in proceeds from the home's sale were deposited into her account.

The couple's current home, on Misty Arch Lane in Columbia, also is titled solely in Valerie Chapman's name, according to the indictment. Valerie Chapman is not charged with any crime. The government did file notice, however, that it would seek criminal forfeiture of the Columbia house, two bank accounts and a certificate of deposit connected to the couple.

Yesterday's indictment also accused Chapman of depriving the state pension system beneficiaries of their "right to honest services" in regard to an alleged affair with former pension trustee Debra B. Humphries.

Humphries pleaded guilty in August to lying to a federal grand jury about the amount of financial assistance she received from Chapman, without disclosing it, while he was managing funds for the retirement system and she served as a state pension system trustee.

Humphries, a Glendening appointee, resigned from the state board as the federal charges against her were expected to become public.

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