CAMDEN, N.J. — A 56-year-old Turnersville man is accused of posing as an agent of a financial institution to divert about $2.8 million in unclaimed investment payments and then trying to collect more than $9.2 million more from the state of Texas, federal prosecutors said.
Robert Armstrong is charged by criminal complaint with bank fraud and mail fraud, the U.S. Attorney’s Office for the District of New Jersey said Tuesday. U.S. Attorney Robert Frazer announced the charges.
Armstrong made an initial appearance Nov. 4 in federal court in Camden before U.S. Magistrate Judge Elizabeth A. Pascal and is being detained.
According to the complaint, a financial institution had invested in a hedge fund that used a bank subsidiary as trustee to pay out money to investors. The financial institution did not claim all the disbursements it was owed, and some of that money was held in trust for it by the bank.
Prosecutors said Armstrong sent the bank false documents claiming he was authorized to collect the money on the institution’s behalf. The bank then issued a check for about $2.8 million payable to the institution, which Armstrong allegedly deposited into an account he controlled.
Over time, other unclaimed disbursements became escheatment funds — dormant assets turned over to a state’s custody after a period of inactivity. Because the institution’s last known address was in Texas, that money was sent to Texas to be held in trust.
Armstrong allegedly submitted false paperwork to Texas, both online and through the U.S. mail, claiming to be an agent of the institution authorized to receive the funds. Based on those filings, he allegedly sought about $9.25 million more.
As part of the scheme, prosecutors said, Armstrong created a fake company, opened a bank account in its name, and used without permission the identity of a person who had served as the institution’s president and chief financial officer.
In a separate scheme, Armstrong allegedly set up a sham school supply company and used a mass-mailing service to send tens of thousands of false invoices to schools for workbooks and other educational materials that were never provided. At least 43 schools have paid, losing at least $11,309 so far, according to the complaint.
The bank fraud charge carries a maximum penalty of 30 years in prison and a $1 million fine. The mail fraud charge carries a maximum of 20 years in prison and a fine of $250,000 or twice the gross gain or loss from the offense.
The case was investigated by the U.S. Postal Inspection Service’s Philadelphia Division and special agents of the Federal Deposit Insurance Corp. Office of Inspector General, under Special Agent in Charge Brian Tucker, with help from the Washington Township Police Department.
The charges are accusations, and the defendant is presumed innocent unless proven guilty.
This report is based on information from the U.S. Attorney’s Office for the District of New Jersey.
Source: U.S. Attorney’s Office press release
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