FORMER CEO PLEADS GUILTY TO EMBEZZLEMENT AND FRAUD

Attorney General J. Joseph Curran, Jr. announced today that Rachel Reed Chittams, age 38, President and CEO of the former Bowie, Maryland business called Capital Concepts, Inc., pled Guilty on August 20,2004, in the Circuit Court for Prince George’s County to the offenses of Fraudulent Misappropriation by a Fiduciary (Embezzlement) and Fraudulent Securities Practices. The Honorable Maureen M. Lamasney, the presiding Judge, scheduled sentencing for October 15, 2004.

In support of the Defendant’s guilty pleas, the State provided a statement of facts including the following: The investigation against Rachel Chittams began in May 1999 when the Maryland Division of Securities of the Office of the Attorney General, learned that advertisements for Capital Concepts, Inc., were being publically distributed in the Washington suburban area of Maryland. The business, advertised as “a financial investment firm that employs a team of professional traders that will assist our investors in attaining their financial goals via the Foreign Exchange Market,” was determined to be a fraud. Neither Rachel Chittams nor anyone else affiliated with Capital Concepts was ever registered as a securities broker- dealer, agent, nor investment advisor. Furthermore, no money received by investors was actually invested in any offshore investment or foreign exchange market, as Ms. Chittams represented and the investors intended. In fact no money received by Capital Concepts was placed in productive investments. Instead, money received from investors was used to maintain the unlawful business scheme and to buy things for the personal benefit of Rachel Chittams and others.

The case was prosecuted by the Criminal Investigations Division of the Attorney General’s Office, with assistance by the Maryland Securities Division and the Maryland State Police.

#