Bowie woman sentenced to serve 5 years, repay $860,000 in `classic Ponzi scheme'

December 02, 2004|BY A SUN STAFF WRITER

A Bowie woman was sentenced Tuesday to five years in prison and ordered to repay more than $860,000 to people she was convicted of bilking in an investment scheme.

The sentence, which includes five years' probation, was handed down to Rachel Reed Chittams, 38, by Prince George's County Circuit Judge Maureen M. Lamasney.

Chittams was convicted of embezzlement and securities fraud in what Kate O'Donnell, deputy chief of criminal investigations in the Maryland attorney general's office, said was a "classic Ponzi scheme."

Though early investors did not lose money, 62 investors lost $1.12 million by June 1999, when the attorney general's office shut down Capital Concepts Inc. in Bowie.

O'Donnell said Chittams told clients their money would be invested offshore and in the foreign exchange market, but Chittams spent the money mostly on herself, including for season tickets in a Washington Redskins skybox ($165,650) and a down payment on a new home ($52,332). She found investors from Prince George's County and Washington through friends, family and churches.

An attorney for the defendant declined to comment yesterday.

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