Author Topic: APNewsBreak: Fla. congressman lost $18M in scheme  (Read 399 times)

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Offline Cincinnatus

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APNewsBreak: Fla. congressman lost $18M in scheme
« on: December 09, 2013, 06:40:29 PM »
A story sure to break the hearts of many on here.

Quote
McLEAN, Va. (AP) — U.S. Rep. Alan Grayson of Florida lost $18 million in a scheme that cheated him and about 120 other investors out of more than $35 million, according to court papers.

The Virginia man who ran the scheme, William Dean Chapman, was sentenced Friday in federal court to 12 years in prison. Prosecutors say Chapman used the money to fund a lavish lifestyle including a Lamborghini, a Ferrari and a $3 million home.

In most of the court papers, Grayson's identity is protected — prosecutors say only that an elected official with the initials A.G. was the primary victim — but documents twice mention Grayson by name. The Democratic congressman on Monday confirmed he is the A.G. mentioned in the documents.

Nothing in the court papers suggests Grayson was anything but a victim of the scheme. Grayson, a former trial attorney, said he has had a long record for picking winning stocks, which formed the basis for his personal fortune.

The scheme worked like this: clients would turn over their stocks to Chapman as collateral for a loan, and Chapman would let customers borrow about 90 percent of the stocks' value.

If the stocks did badly, borrowers could walk away and keep the money they were loaned. But if the borrowers' stocks did well, they would repay the loan with interest, and Chapman was supposed to return the stocks to the investor at their increased value.

But, according to court papers, Chapman sold the stocks and had no way to fulfill his obligations if a client's stock portfolio did well.

"That's why (Chapman) is going to prison for a long, long time," Grayson said. "At least in the end, some kind of justice was served."

In Grayson's case, his stocks performed astronomically well while they were entrusted to Chapman and his company, Alexander Capital Markets...

It is not the first time Grayson, who represents parts of the Orlando area, has lost tens of millions of dollars in a fraud scheme. In 2009, he won a $34 million judgment after filing a lawsuit in South Carolina under federal racketeering laws against a company called Derivium Capital. Derivium's business plan for hedging an investor's stock profile was nearly identical to the plan outline by Chapman


http://www.charter.net/news/read/category/Top%20News/article/ap-apnewsbreak_fla_congressman_lost_18m_in-ap

What's the major lesson to be discovered here? That Grayson is as stupid in his investment strategies as he is in politics; or, that Grayson, Democrat icon though he be, seems to be somewhat guilty of what he and his fellows constantly condemn: greed?
We shall never be abandoned by Heaven while we act worthy of its aid ~~ Samuel Adams

Offline flowers

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Re: APNewsBreak: Fla. congressman lost $18M in scheme
« Reply #1 on: December 09, 2013, 06:56:41 PM »
  It is so sad to hear this ......really it is.


Online mystery-ak

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Re: APNewsBreak: Fla. congressman lost $18M in scheme
« Reply #2 on: December 09, 2013, 07:00:01 PM »
  It is so sad to hear this ......really it is.

I know it is...I am all broke up over this....... :silly:

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Offline EC

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Re: APNewsBreak: Fla. congressman lost $18M in scheme
« Reply #3 on: December 09, 2013, 07:03:49 PM »
Quote
If the stocks did badly, borrowers could walk away and keep the money they were loaned. But if the borrowers' stocks did well, they would repay the loan with interest, and Chapman was supposed to return the stocks to the investor at their increased value.

Come on. Please. A 6 year old wouldn't fall for that.
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Offline flowers

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Re: APNewsBreak: Fla. congressman lost $18M in scheme
« Reply #4 on: December 09, 2013, 07:05:39 PM »
I know it is...I am all broke up over this....... :silly:

I am broke up too....I was laughing so hard I felt guilty..............................well not for long. Just brings a warm feeling throughout your body with the happiness!


Offline Atomic Cow

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Re: APNewsBreak: Fla. congressman lost $18M in scheme
« Reply #5 on: December 09, 2013, 07:08:49 PM »
"...And these atomic bombs which science burst upon the world that night were strange, even to the men who used them."  H. G. Wells, The World Set Free, 1914

"The one pervading evil of democracy is the tyranny of the majority, or rather of that party, not always the majority, that succeeds, by force or fraud, in carrying elections." -Lord Acton


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