November 30, 2004
CEO RACHEL CHITTAMS RECEIVES 5-YEAR SENTENCE FOR EMBEZZLEMENT
AND SECURITIES FRAUD
Attorney General J. Joseph
Curran, Jr. announced today that Rachel Reed Chittams, age 38,
President and CEO of the former Bowie, Maryland
investment business called Capital Concepts, Inc., was sentenced
by Prince George’s Circuit Court Judge Maureen M. Lamasney
to serve 5 years in the Division of Corrections followed by 5 years
probation for her convictions on charges of embezzlement and Securities
Fraud. During probation, Chittams is ordered to make restitution
in the amount of $861,348.08 to investors named in the indictment.
The sentence follows Chittams' pleas of guilty on August 20, 2004.
The Defendant’s conviction and sentencing follows an investigation
by the Criminal Investigations Division of the Attorney General’s
Office, assisted by the office’s Division of Securities and
the Maryland State Police. The State’s criminal case involved
embezzlement and securities fraud committed by Rachel Chittams
against 62 investors, totaling $1,116, 314.02.
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 publicly 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." This representation was 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 Ponzi investment scheme and to buy things
for the personal benefit of Rachel Chittams and others.
Rachel Chittams’ personal spending included a $52,332.81
down payment on a new home, season tickets in a Redskins sky
box valued at $165,650.00; two Rolex watches worth $36,000; personal
spending of over $140,000 on the company American Express card;
a $53,143.00 Jaguar automobile; payments of $101,491.78 to lease
other luxury automobiles; and jewelry worth $9,707.25.