After months of rumors, Brian Campbell, the former managing director of Bayonne-based Pamrapo Saving Bank’s investment company, was arrested last week and charged with allegedly diverting and embezzling more than $681,000. This came less than two months after Pamrapo voted to merge with Bayonne Bank Corps – the details of which are still being worked out.
The charges were announced on June 2 by Paul J. Fishman, United States attorney for the District of New Jersey, and other officials.
“We will vigorously defend the case and fully expect to prevail when it comes to trial.” – Michael J. Rogers
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Campbell was the managing director and an employee of Pamrapo Service Corporation, headquartered in Bayonne. The now-defunct Service Corporation was the investment subsidiary of Pamrapo Savings Bank, S.L.A., a savings and loan holding company. The 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 addition, the Service Corporation offered insurance products, including variable insurance and annuity products, by and through insurance companies.
When contacted by the Bayonne Community News, Michael J. Rogers, the attorney defending Campbell, said, “We will vigorously defend the case and fully expect to prevail when it comes to trial.”
Conflict before a vote
Allegations of wrongdoing surfaced earlier this year during a conflict among some of the stockholders in the lead-up to the merger vote. Campbell is the son of William J. Campbell, Pamrapo’s largest shareholder. William Campbell had opposed the merger and filed suit against Pamrapo and a handful of its directors to try to block the pending acquisition of the bank by BCB Bancorp.
At that time, some of the shareholders raised concerns about Brian Campbell’s activities, claiming that an indictment was forthcoming.
The younger Campbell is being accused of diverting money to himself that was supposed to go to the bank’s service corporation as part of securities transactions, such as the purchase, sale and transfer of stocks.
According to the indictment, “any commissions or fees generated by Campbell as a registered representative of the broker-dealer, as a registered investment advisor of the accounting company, or through the insurance products were considered property of the Service Corporation and were to be shared by these two entities and the Service Corporation. After the Service Corporation received its portion of the fees and commissions from the broker-dealer and the accounting company, the Service Corporation paid compensation to Campbell at rates set by the Board of Directors.”
The indictment claims that at some point around August 2006, Campbell’s compensation was modified, resulting in his
receiving a significant pay cut. In approximately 2007, according to the indictment, Campbell allegedly created a scheme to divert money belonging to the Service Corporation to himself. Specifically, the indictment alleges that Campbell sent a letter to the registered broker/dealer, which falsely claimed that Pamrapo Savings Bank wanted commissions owed to the Service Corporation to be paid directly to Campbell. Also without the authorization or knowledge of the Board of Directors, Campbell allegedly caused a second letter to be signed that directed the registered broker-dealer and the accounting company to pay the vast majority of the fees and commissions owed to the Service Corporation directly to Campbell.
In addition, Campbell allegedly caused various insurance companies to issue fees and commissions owed to the Service Corporation directly to him, without the authorization or knowledge of the Board of Directors.
Campbell then allegedly made false statements to the Pamrapo Savings Bank, its chief financial officer, the Board of Directors, the Service Corporation, and others, to cover up and conceal his scheme, as well as to allow it to continue.
According to the indictment, Campbell allegedly received more than $600,000 in checks from the various entities as a result of his scheme. In addition, the indictment alleges that Campbell laundered portions of the fraud proceeds to pay his credit card bills.
Campbell faces up to 20 years in prison on each mail-fraud count and up to 10 years on the money-laundering charges.