Despite a tear-filled apology and an emotional plea for mercy, Daniel Baldwin Jr., a senior securities broker who once orchestrated stock trades for pension fund manager Nathan Chapman, was sentenced in federal court yesterday to serve 18 months in prison.
Baldwin, 49, of Randallstown, pleaded guilty in October to one count of securities fraud for buying hundreds of thousands of dollars' worth of shares for a startup company run by his boss at eChapman.com Inc. A federal jury convicted Chapman in 2004 of bank fraud; he is appealing the conviction.
Baldwin often bought the stock on behalf of his clients without their permission, only to have the shares prove worthless. When he was asked about his activities by FBI agents and a grand jury, Baldwin lied, saying all his clients knew he had invested their money in the eChapman stock.
Assistant U.S. Attorney Craig M. Wolff said yesterday that Baldwin's scheme targeted the elderly and inexperienced, including some who requested a low-risk investment. Prison time, Wolff said, was the "only just punishment given the seriousness of the crime."
At the time he was charged in a 35-count indictment in June, Baldwin denied all the charges, saying in a statement, "I take great pride and responsibility in advising my clients diligently, professionally and honestly."
Yesterday, he described himself as a broken man so disgraced that he could no longer consider himself a role model to his 10-year-old son.
Baldwin's wife, parents and two of his three sisters watched as he stood to address the judge and then slowly broke down.
"I stand here today in fear and in trembling," he said, clutching a tissue. "This is the darkest hour of my life. And I grieve over the fact that so many people have been affected by my actions."
Referring to Chapman, he added: "I followed the cues of my leader, perhaps too blindly."
U.S. District Judge J. Frederick Motz agreed, concluding that Baldwin committed his crime, in large part, because "of blind loyalty to Mr. Chapman."
The judge ordered Baldwin to complete three years of probation after his prison sentence and pay restitution to at least six victims, totaling more than $227,825.
Motz added that Baldwin was still a "good and decent man," finding that the broker held a central role in the eChapman.com fraud, but was a "minor player" in the scheme run by Chapman.
The related case against Chapman stemmed from the way he tapped the state's pension system to buy stock in his own companies.
As a result, prosecutors said, the retirement system lost virtually all that money as his companies' value plummeted.
Prosecutors put losses at $5 million.
Chapman had agreed to pay $215,000 in exchange for federal prosecutors dropping bank fraud charges left over from his public corruption trial.
But prosecutors said recently that Chapman failed to pay, prompting them to bring him back to trial, now scheduled for Oct. 2.