Coleman sent back to prison for faltering on repayment

Former stockbroker now to serve 3 years

May 28, 2004|By William Patalon III | William Patalon III,SUN STAFF

Monica Lynn Coleman, released from jail in March last year after serving time for securities fraud and misappropriation, was sent back to state prison for three years yesterday after a judge ruled that the former financial adviser had violated terms of her probation.

Coleman, now 47, pleaded guilty in April 2002 to five counts of securities fraud and one count of misappropriation by a fiduciary arising from her role in Coleman Craten LLC, a brokerage she opened with great fanfare in 1998. Of her original 15-year sentence, all but one year had been suspended.

Coleman was released in March 2003 and placed on probation for five years, with the stipulation that she make monthly restitution payments. After ruling that Coleman failed to meet those requirements, Baltimore City Circuit Judge Althea Handy yesterday sent the former investment adviser back to prison for three more years, the Maryland attorney general's office said yesterday.

"She victimized many trusting investors," said David L. Goldberg, the Maryland assistant attorney general who is handling the case. "Upon being given the opportunity to make it all right," she failed to do so.

Coleman's attorney, Cornelius Carmody, said his client did the best she could and was stunned by the decision and what he saw as the harshness of the sentence.

"She paid 120 percent of her earnings for restitution and they still sentenced her to jail," he said. "They told her that she should get a second job."

Carmody said he was trying to determine if the judge's decision could be appealed.

Coleman, a former Legg Mason stockbroker, was the driving force behind Coleman Craten, a brokerage house designed to lure investors to posh surroundings where they could sit, socialize and monitor their investments. It featured billiard tables, a research library and tuxedo-clad doormen. Coleman's grandiose plans called for her firm to hire 400 people, including 120 financial advisers and stockbrokers who would be ever-present to serve the members of this downtown club.

Unfortunately, the wealthy never came, and criminal investigators said Coleman misappropriated about $2.6 million from the few investors she had in a futile attempt to keep her business afloat. Securities regulators shut down Coleman Craten months after it opened its doors. The firm subsequently filed for bankruptcy, and investors recovered some of their money.

As a condition of her probation, Coleman was required to make monthly restitution payments of up to $30,0000 throughout the five-year term after her release from jail. But what authorities were really looking for was for Coleman to make a "good faith effort" to repay as much as possible each month, according to Goldberg. Instead, Coleman, who was said to be working as a waitress in Washington, repaid a total amount of $1,200 after her release, and went months at a time without making any payments, Goldberg said.

Angering prosecutors even more was the fact that Coleman attempted to return to night school, instead of using the time to seek a second job, Goldberg said. And that may well have been the "last straw," conceded Carmody, Coleman's attorney, who said his client's motives were completely misunderstood. Barred from working in the securities industry, Carmody said, Coleman wanted to go back to school so that she could find a new profession that would pay more than waitressing - and enable her to pay back what she owed faster than she could working in a restaurant.

Carmody said Coleman made a $6,000 payment yesterday, which included a tax refund she had received.

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