Managing Director of Bank’s Investment Company Convicted of Embezzling More Than $571,000

WASHINGTON – The former managing director of the Pamrapo Service Corporation (Service Corporation), the investment arm of the former Pamrapo Savings Bank, was convicted today of embezzling more than $571,000 in commissions and fees belonging to the Service Corporation through a mail fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney Paul J. Fishman for the District of New Jersey.

The jury returned the guilty verdict against Brian M. Campbell, 42, of Bayonne, N.J., following an eight-day trial before U.S. District Judge Dickinson R. Debevoise in Newark.  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 three counts of money laundering. 

According to court documents and evidence presented at trial, Campbell was the managing director and employee of the Service Corporation, 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, according to court documents and evidence presented at trial, 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.  Thereafter, 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 Pamrapo Savings Bank’s board of directors revised Campbell’s commission structure, resulting in a substantial pay cut for Campbell.

In early 2007, according to court documents and evidence presented at trial, Campbell contacted representatives from Prime and Asset and Financial Planning, falsely telling them that Pamrapo Savings Bank wanted to get out of the investment advisory business and that 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 the 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 that 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 that 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. 

According to court documents and evidence presented at trial, Campbell concealed the fact that he was receiving these checks from Prime and Asset and Financial Planning by, among other ways, directing his administrative assistant to falsify financial records related to these diverted checks.

Each of the 33 counts on which Campbell was convicted carries a maximum sentence of 20 years in prison and a $250,000 fine, as well as forfeiture and restitution.  Sentencing is currently scheduled for June 20, 2011. 

The case was investigated by IRS-Criminal Investigation and the Federal Deposit Insurance Corporation–Office of Inspector General.  The case was prosecuted by Trial Attorney Keith Liddle of the Criminal Division’s Asset Forfeiture and Money Laundering Section and Assistant U.S. Attorney Anthony Moscato of the U.S. Attorney’s Office Organized Crime/Gangs Unit in Newark.