Columbia Man Sentenced for $1.1 Million Investment Fraud Scheme
JEFFERSON CITY, Mo. – A Columbia, Mo., man was sentenced in federal court today for a $1.1 million investment fraud scheme.
Billings Chapman, 79, was sentenced by U.S. District Judge Stephen R. Bough to one year and six months in federal prison without parole. The court also ordered Chapman to pay $1,123,814 in restitution to his victims.
On April 30, 2018, Chapman pleaded guilty to one count of mail fraud and one count of money laundering. Chapman was partial owner of CheckmarcUSA, LLC, a company formed to provide bad check collection services to banks. He also owned Federal Financial Services, LLC (FFS), which he used to solicit investors.
Chapman admitted that he engaged in a scheme from May 26, 2011, to April 30, 2014, to defraud investors by making materially false representations and using investment funds for his own personal benefit. Chapman guaranteed monthly payments to investors and misrepresented to investors his financial condition and the financial condition of FFS. Chapman falsely claimed that large numbers of banks had signed up for CheckmarcUSA’s services and that FFS was accruing substantial income as a result.
Chapman did not tell investors that he had been barred from engaging in the securities industry in 1970 by the National Association of Securities Dealers, or that he had been issued cease and desist orders in 1991 and in 2004 from the Missouri Commissioner of Securities for engaging in fraudulent or illegal practices in the securities business. Chapman, who was not registered to sell securities in Missouri, used investor money for his own personal gain and to make payments to prior investors.
According to court documents, the loss to Chapman’s victims totaled $1,123,814. A number of the victims were devastated financially by their loss. For example, one victim lost all of his retirement savings and had to suspend his retirement and resume working. Another victim, a single mother of two, invested her entire savings with Chapman and FFS, and her loss caused her to be unable to pay her bills.
This case was prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI.