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Congressman Loses Millions In Fraud Scheme For Second Time In His Life

AP Photo / J. Scott Applewhite

Grayson -- who has been named one of the 50 richest members of Congress -- personally lost $18 million to Chapman, according to the AP.

Believe it or not, it's the second time this kind of thing has happened to Grayson -- in 2009, he won a $34 million judgment in a lawsuit against a company whose business plan was similar to Chapman's.

Chapman's scheme involved clients handing over stocks as collateral for loans from his company, Alexander Capital Markets. If the stocks did well, customers were supposed to repay Chapman with interest and would then get the stocks back at their increased value. But court papers say Chapman sold the stocks and had no way to repay clients if their stocks did well.

The court papers do not suggest Grayson was anything but a victim in the scheme, according to the AP. His stocks performed "astronomically well" after he turned them over the Chapman, the AP reported, and lawyers for Chapman argued they did so well they undid Chapman's scheme.

"If they had not sold the collateral, it all would have worked," Grayson told the AP.

Grayson was named in two court documents, despite procedures to protect victims' privacy.

"I think that's unfortunate," Grayson said. "They should have been more careful, should have used my initials throughout rather than using my name."