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For Immediate Release
November 30, 2004
Media Contact:
Kevin Enright 410-576-6357

FORMER 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.

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