U.S. Rep. Alan Grayson, D-Fla., is best known for taking to the House floor to proclaim that the Republican Party’s plan for healthcare is for Americans to “die quickly,” but it’s his portfolio that may be feeling pretty ill.
According to court records, the bombastic congressman lost $18 million in a scheme that cheated him and about 120 other investors out of more than $35 million, The Associated Press reported.
William Dean Chapman, sentenced on Friday to 12 years in prison, ran the scheme and prosecutors say he used the money to fund a lavish lifestyle that included a Lamborghini, a Ferrari and a $3 million home, according to the report.
Grayson’s identity is protected in most of the court papers, with only his initials being used, but twice his name appears in documents and Grayson confirmed Monday that he is A.G.
“They should have been more careful, should have used my initials throughout rather than using my name,” Grayson told the Associated Press.
As reported, 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. 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 Chapman sold the stocks and had no way to fulfill his obligations if a client’s stock portfolio did well, court documents show.
“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.”
This is not the first time Grayson has lost tens of millions of dollars in a fraud scheme, the report said. 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.
As for having sympathy for Grayson, according to Roll Call, he is the eleventh richest member of Congress, with a total net worth estimated at $31.41 million — give or take $18 million.
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