Ex-Naugatuck Savings Bank exec pleads guilty to embezzlement in Connecticut

A former bank vice president pleaded guilty Friday to embezzling more than $1 million from the bank over eight years of working there.Federal authorities say 48-year-old Robert A. Nixon, of East Haven, was the vice president of operations of the bank when it was known as Castle Bank and Trust, which merged with Naugatuck Savings Bank in 2009.The fraud was discovered last year after Nixon severed ties with the bank and the merger was completed, according to authorities.Nixon was working in Castle's Middletown office when he began to funnel funds from the bank's account, then cooked the books to cover his tracks, according to a statement by the U.S. Attorney's Office.
Robert A. Nixon, 48, of Maynard Road, East Haven, pleaded guilty today in New Haven to one count of theft, embezzlement, or misapplication by a bank officer or employee, and one count of income tax evasion.

The charges stem from Nixon’s embezzlement of more than $1 million from the former Castle Bank and Trust of Middletown, now Naugatuck Savings Bank, while he was Vice President there.According to court documents and statements made in court, while Nixon was Vice President of Operations of Castle Bank and Trust between 2000 and 2008, he 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 either withdrew cash from his friend’s account or had his friend take money out and give it to him. H also directed his friend to transfer funds by check from the Castle account to accounts that his friend held at other banks, and then withdraw the cash and give it 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 money to make mortgage payments, personal credit card payments, car payments, home improvements, and also to gamble.The fraud was discovered after Nixon left the bank in August 2009, and after the parent company of Naugatuck Savings Bank had acquired Castle.
He 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.Nixon is scheduled to be sentenced by United States District Judge Janet Bond Arterton on October 25. He faces a maximum sentence of 35 years and fine of up to approximately $2 million. He also will be ordered to pay $1,039,227.34 in restitution to Naugatuck bank, as well as full restitution to the IRS, plus applicable interest and penalties.