Managing director of bank’s investment company sentenced to six months in prison for embezzling more than $571,000
FOR IMMEDIATE RELEASE
November 21, 2011
NEWARK, N.J. – The former managing director of the Pamrapo Service Corp. – the investment arm of the former Pamrapo Savings Bank – was sentenced today to six months in prison for embezzling more than $571,000 in commissions and fees belonging to the service corporation through a mail fraud scheme, U.S. Attorney Paul J. Fishman and Assistant Attorney General Lanny A. Breuer of the Department of Justice’s Criminal Division announced.
Brian M. Campbell, 43, of Bayonne, N.J., was convicted by a jury on March 22, 2011, following an eight-day trial before U.S. District Judge Dickinson R. Debevoise in Newark federal court. Campbell was convicted of all 33 mail fraud counts charged in the Superseding Indictment on which he was tried. The jury was unable to reach a verdict on four counts charging Campbell with money laundering.
According to documents filed in this case, statements made in court and the evidence at trial:
Campbell was the managing director and employee of the Pamrapo Service Corp., d/b/a Pamrapo Financial Center, headquartered in Bayonne. The now-defunct service corporation was the investment subsidiary of Pamrapo Savings Bank S.L.A., a Savings and Loan Association. The service corporation provided securities and investment services, such as the sale of stocks and bonds, mutual funds, annuities, various types of insurance policies, and other money management services, to clients for a fee.
In August 2001, the service corporation entered into a contract with Prime Capital Services Inc. (“Prime”), a broker-dealer of securities transactions. In addition, in August 2001, Campbell entered into a contract with Prime where he agreed to act as a registered representative for Prime on behalf of the service corporation. Based on these contracts and the service corporation’s own written policy statements, all commissions and fees were required to be paid by Prime, and its sister company, Asset and Financial Planning Ltd., directly to the service corporation. Asset and Financial Planning was an investment advisory business that managed investors’ money for a flat rate. The service corporation paid Campbell his salary and a portion of the commissions received by the service corporation. The government did not allege any wrongdoing on behalf of Prime or Asset and Financial Planning, and representatives of these companies testified on behalf of the government at trial.
In August 2001, the service corporation’s board of directors and, later, the bank’s board of directors, revised Campbell’s commission structure, resulting in a substantial pay cut for Campbell.
In early 2007, Campbell contacted representatives from Prime and Asset and Financial Planning, telling them falsely that Pamrapo Savings Bank wanted to get out of the investment advisory business and the bank wanted all commissions sent directly to Campbell. In May 2007, Campbell sent a letter to Prime’s president, repeating these false statements. During trial, Campbell’s administrative assistant testified that she typed this letter after Campbell repeatedly requested her to type it. At trial, the bank’s chairman of the board, another director on the board, and the bank’s chief financial officer testified that statements Campbell made were false, and Campbell was not authorized by the bank to speak on its behalf.
On July 25, 2007, Campbell had his father, the bank’s president, sign a letter that directed Prime to send a substantial amount of Prime and Asset and Financial Planning’s commissions and fees directly to Campbell. Campbell did this despite the fact that approximately two days before, he told the general counsel of Prime he did not believe the bank would change the commission arrangement because it required a board meeting. The testimony at trial established that this letter was concealed from the chief financial officer and the bank’s Board of Directors.
Campbell concealed the fact that he was receiving commissions and fees that belonged to the service corporation from Prime and Asset and Financial Planning by directing his administrative assistant to falsify financial records related to these diverted checks.
In addition to the prison term, Judge Debevoise sentenced Campbell to three years of supervised release, ordered to forfeit of $571,114.86 and pay $300,758.35 in restitution.
U.S. Attorney Fishman credited special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Victor W. Lessoff, and special agents of the Federal Deposit Insurance Corporation–Office of Inspector General, under the direction of Inspector General Jon T. Rymer, for the investigation leading to today’s sentencing.
The government is represented by Trial Attorney Keith Liddle, U.S. Department of Justice, Asset Forfeiture and Money Laundering Section; and Assistant U.S. Attorney Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Michael J. Rogers Esq., Somerville, N.J.