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October 27, 10

NEWS / Former Bank Vice President Sentenced to 55 Months in Federal Prison for Embezzling More Than $1 Mill


David B. Fein, United States Attorney for the District of Connecticut, announced that ROBERT A. NIXON, 48, of Maynard Road, East Haven, was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 55 months of imprisonment, followed by three years of supervised release, for embezzling more than $1 million from the former Castle Bank and Trust, now Naugatuck Savings Bank. On August 6, 2010, NIXON pleaded guilty to one count of theft, embezzlement, or misapplication by a bank officer or employee, and one count of income tax evasion.

According to court documents and statements made in court, NIXON was employed as the vice president of Operations of Castle Bank and Trust (“Castle”) in Middletown. Between 2000 and 2008, NIXON made or caused other bank personnel to make computer entries that transferred funds from Castle’s general account into a friend’s personal savings and checking accounts at the bank. NIXON then withdrew cash from his friend’s account and directed his friend to withdraw cash from his friend’s account and provide that cash to the defendant. NIXON also directed his friend to transfer funds by check from the Castle account to accounts that his friend held at other banks, and then directed his friend to withdraw cash from the accounts (by either checks made payable to “cash” or ATM withdrawals) and provide the cash to NIXON.

The total amount of money embezzled through this scheme was $1,039,227.34.

In order to hide his theft, NIXON used his position to cause false entries to be made in Castle’s general account and “reprocess” official Castle bank checks that had already been cashed by the respective payees and debited by Castle, which caused an additional debit to appear in the general account.

NIXON used the proceeds of his theft to make mortgage payments, personal credit card payments, car payments, home improvements, and also to gamble.

The fraud was discovered after NIXON left the employment of the bank in August 2009, and after the parent company of Naugatuck Savings Bank had acquired Castle.

NIXON also failed to pay federal taxes on the funds that he embezzled. For the 2002 through 2008 tax years, this resulted in an underpayment of $268,784 to the Internal Revenue Service.

Today, Judge Arterton ordered NIXON to pay a total of approximately $1.2 million in restitution to Naugatuck Savings Bank and its insurer, which includes costs the bank incurred while investigating the fraud. NIXON also must pay full restitution to the IRS, plus applicable interest and penalties.

This matter was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation. The case was prosecuted by Assistant United States Attorneys David E. Novick and Michael J. Gustafson.

http://newhaven.fbi.gov/dojpressrel/pressrel10/nh102610.htm

Tags: document, criminal investigation,
 




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