Thursday, June 16, 2005

 

Another $1.3 million lost at BWC

It's deja vu all over again!

We apologize, but this is going to sound a lot like yesterday's post. The Plain Dealer reported today that the BWC investment fund lost $1.3 million of the $20 million it had given another shady character to invest on its behalf:
At the same time a Maryland investment manager was losing millions of dollars in a fraud scheme, the Ohio Bureau of Workers' Compensation allowed him to continue managing $20 million of its money.

In the end, the bureau says, it lost $1.34 million of the $20 million it invested with Chapman Capital Management, a firm owned by Baltimore investment manager Nathan Chapman.

The bureau gave Chapman Capital Management $20 million to invest between May 1998 and February 2000 and allowed him to invest that money until March 7, 2003, according to bureau spokeswoman Emily Hicks.

During two of those years, one of Chapman's companies lost about $40 million in clients' money in a well-publicized fraud scheme perpetrated by another bureau investment manager, Alan Brian Bond, according to published reports.

[. . .]

Bond is now in federal prison. Chapman is in legal trouble, too, for a separate scheme.

On Aug. 12, a federal jury convicted Chapman of defrauding two pension funds, shareholders in his company and the public. He was sentenced to 90 months in prison on 23 counts and ordered to pay more than $5 million in restitution.

[. . .]

He was indicted on those charges on June 26, 2003 - three months after the bureau had ended its business with Chapman.

And, besides being a crook, what kind of guy was Chapman? Read it and weep:
Prosecutors said Chapman, 47, used some of that money to lavish gifts on mistresses, including $7,000 for a college graduation party for one of them.

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