Curran Obtains Injunction Against Prince George's Investment Company Charged with Securities Violations and Investment Fraud
Baltimore - Attorney General J. Joseph Curran, Jr., announced today that the Securities Division of his office has obtained a permanent injunction order against Capital Concepts, Inc., of Prince George's County and its president Rachel Reed Chittams, charged with violating Maryland's securities laws by operating a fraudulent investment scheme involving millions of dollars.
The order, issued by Circuit Court Judge Michele D. Hotten, also maintains a freeze of the defendants' assets and continues the work of the receiver in gathering and accounting for investor funds. Capital and Chittams consented to the order, without admitting or denying violation of the Securities Act. "This relief by the Court will not only halt the unlawful solicitation of investors and the loss of their money," Curran stated, "but eventually may lead to the return of some funds to investors and other creditors."
Curran's office began its investigation following an inquiry from a potential investor. That investigation revealed that neither the company, its investments, or its promoters were registered with the Securities Division as required by Maryland law. "That inquiry by an investor before committing her money not only prevented her loss," Curran emphasized, "but also was the catalyst for an action that prevented the loss of countless other investors' funds."
Curran says the Securities Division filed suit not only to halt the registration violations, but also because the Capital investment program had the indications of a "ponzi scheme;" there was no business or investment to generate the profits promised to investors, but rather the money invested was used to repay previous investors, and so on. The accountant's analysis showed that over 400 investors had placed over $5 million with the defendants, upon the promise of rates of return as high as 1000%. At the time suit was filed and Capital's assets were frozen, there was only about $175,000 in the bank, with over $3 million due investors. "It appears that investors will not get back all of their investment," Curran explained, "because their money was not used to generate income with which to repay them. This case emphasizes the need to verify with the Securities Division - before you invest - that any investment opportunity is registered and has no complaints against it."
Curran reminded investors that they can contact the Securities Division at 410-576-6494 if they have questions concerning the status of investment promoters or the securities in which they plan to invest.