Raymond V. Haysbert, an elder statesman of Maryland's African-American business community, testified yesterday that he quit the board of investment banker Nathan A. Chapman Jr.'s company after being asked to sign off on documents he wasn't shown.
Haysbert, the 84-year-old former chief executive of Parks Sausage Co., said he would not accept legal liability for signing U.S. Securities and Exchange Commission filings without seeing the complete documents.
"So I refused to sign," Haysbert said.
Chapman is on trial in U.S. District Court on charges of defrauding the Maryland state pension system and his own publicly traded companies, among other charges. The indictment alleges, in part, that he made false statements to the SEC.
Haysbert, who said he was Chapman's first customer when the younger man became the first African-American broker at Alex. Brown & Sons, testified that Chapman asked him to serve on the board of eChapman.com in November 1999.
According to Haysbert, meetings of the company's board were "erratic in nature" and usually conducted with many members participating by telephone. He said directors did not receive the type of detailed information he was used to receiving during his service on other corporate boards.
Haysbert said the staff would repeatedly fax him "signature pages" seeking his approval of filings he hadn't seen. He said the practice prompted him to resign from the board in the spring of 2002.
The prosecution produced a document showing that the company later told the SEC that Haysbert was re-elected to the board in June 2002. Haysbert testified that was done without his knowledge.
Under cross-examination by defense attorney William R. "Billy" Martin, Haysbert said he still considers Chapman's integrity to be "unimpeachable."
But he acknowledged telling the FBI that Chapman's drive to build his business outpaced his abilities. "He was moving so fast, I don't think he had time to put a consolidated organization behind him. He was going 85, 90 miles per hour," Haysbert said.
In other testimony, a former executive of Chapman's companies told the jury he repeatedly attempted to get Chapman to document how he spent "business development" checks issued by the company.
Prosecutors contend that Chapman used much of the money for personal spending, including payments to women with whom he had extramarital romantic relationships.
Demetris Brown, former chief financial officer of two Chapman companies, said Chapman always said he would provide the receipts, but that he never did.