A federal judge Monday sentenced Nathan A. Chapman Jr., former chairman of the state university system, to 71/2 years in prison for defrauding the state pension fund and other offenses.
Judge William D. Quarles Jr. also ordered Chapman to pay $5 million restitution for crimes that the judge said shook public trust in the retirement fund.
Quarles said he recognized that Chapman, a politically connected investment banker who ascended into the exclusive world of high finance, had "many admirable, wonderful qualities" but said his conduct had contributed to a general "cynicism toward public officeholders."
Chapman, 47, did not visibly react as the sentence was imposed. He was not taken into custody Monday, and his defense attorneys filed papers asking that he be allowed to remain free while his case is appealed.
"I never intended to defraud anyone," Chapman told the judge. He added: "I have to believe that with the crucifixion, there will be a resurrection. At the end of this, I do believe I will go back to being a productive member of society."
In August, a jury found that Chapman, whose companies controlled millions of dollars from the state fund and other pension funds, used state pension money under his management to invest in his own businesses, losing millions when his company's stock price fell during the market downturn of 2000.
They also found that he took company money intended for business-related expenses and used it for personal indulgences. Prosecutors alleged that Chapman took more than $500,000 from his companies, failing to account for any of it and spending a portion of it on extramarital affairs. The jury also found him guilty of making false statements on tax returns.
In all, Chapman was found guilty of 23 felony offenses: wire fraud, mail fraud, investment advisory fraud and making false statements to a government agency. He was acquitted on seven counts, and the jury did not agree on two other counts.
In advance of Monday's proceeding, prosecutors had requested a prison term of as much as 151/2 years; the defense had asked for as little as 31/2 years.
Quarles imposed a term of 71/2 years, to be followed by three years of supervised release, ruling that Chapman's term ought not be lengthier than that imposed on currency trader John M. Rusnak in Baltimore last year. Rusnak, who authorities accused of doctoring books to hide losses of $691 million, pleaded guilty and was sentenced to 71/2 years in prison.
Chapman's attorneys argued in court filings that he was the "epitome of a self-made man," rising from humble beginnings to build the first African American-controlled publicly traded investment bank. They drew on sympathetic letters from such figures as Calvin W. Burnett, the state's secretary of higher education. They argued that he did not pocket the money; that he considered the stock a good investment; and that his three daughters, elderly mother and ailing wife -- from whom he is now separated -- need him.
One of his attorneys, William R. Martin, emerged from the courthouse to tell reporters that he had filed notice of Chapman's intention to appeal as well as papers asking the judge to permit Chapman to remain free until the appeal is resolved.
Before passing sentence, Quarles said he was disturbed that public discussion of the trial had cast suspicion -- without merit, he said -- on Chapman's political ally, former governor Parris N. Glendening (D).
During the trial, defense attorneys said prosecutors had invested huge resources trying to build a criminal case against Glendening. After authorities failed to muster evidence to indict Glendening, the defense attorneys alleged, they went after Chapman as a consolation prize.