A Sterling, Va., businessman who prosecutors say cheated customers out of $35 million while he purchased a custom-built $3 million home, condominiums in the Turks and Caicos Islands and a Lamborghini and a Ferrari was sentenced to 12 years in prison Friday, authorities said.
Prosecutors said William Dean Chapman, 44, orchestrated a complicated, $270-million stock loan scheme that ultimately cost 122 of his customers $35 million.
Chapman, the founder of Alexander Capital Markets, persuaded customers to turn over securities they had purchased to him in exchange for cash loans worth 85 to 90 percent of the securities’ value, promising that if they repaid the loans with interest, they could have the securities back after some years, prosecutors said. And even if they did not pay back the loan, the customers could simply walk away and let Chapman keep their securities, prosecutors said.
Chapman’s company, though, immediately sold the customers’ securities, loaned them a portion of the proceeds and kept the rest, prosecutors said. By April 2008, prosecutors said, the company was insolvent, but Chapman continued to swindle new customers.