Business Ethics and Corporate Culture

Managing Director Convicted for Embezzlement

The US Department of Justice (DoJ) has announced that former Pamrapo Service Corporation (Pamrapo) managing director Brian Campbell has been convicted of embezzling in excess of US$571,000 in fees and commissions belonging to Pamrapo. In 2001, Pamrapo (subsidiary of Pamrapo Savings Bank) entered into an agreement with Prime Capital Services Inc (Prime), a broker dealer of securities investments, where it was agreed that Prime and its sister concern Asset and Financial Planning Ltd would pay all fees and commissions directly to Pamrapo. In 2007, Mr Campbell falsely told the two entities that Pamrapo Savings Bank “wanted to get out of the investment advisory business and that the bank wanted all commissions sent directly to [Mr] Campbell”, resulting in a substantial amount of fees and commissions being sent to him directly.
DoJ’s media release (22 March 2011)
(Source: DoJ)

Contractor Admits to Employment Tax Fraud

The US Department of Justice (DoJ) has announced that the owner and operator of Rock Construction Builders Inc (RCB), Reynaldo Orozco, has pleaded guilty to filing a false tax return. Mr Orozco issued RCB checks to corporations holding them out to be legitimate subcontractors, when in fact these entities did not perform any work for RCB, and subsequently cashed these checks to pay RCB employees. Mr Orozco failed to report cash wages on his tax returns and failed to withhold and pay employment tax on these wages.
DoJ’s media release (22 March 2011)
(Source: DoJ)

Renault Apologizes for False Charges of Espionage
Europe, Middle East and Africa

Reuters reports that Renault has issued a public apology to the three executives accused of spying after prosecutor Jean-Claude found no case against them. Bank accounts allegedly belonging to the executives, Bertrand Rochette, Matthieu Tenenbaum and Michel Balthazard, and considered pivotal to the espionage charges, were found not to exist, according to Reuters. Reportedly, Renault chief executive Carlos Ghosn and chief operating officer Patrick Pelata have publicly apologised to the executives and are “committed that reparations be made to the three executives, and that their honor in the public eye be restored”.
Reuters: Renault says sorry to execs over false spy claims (14 March 2011)

Related news item:
Reuters: Renault CEO under pressure after spy case unravels (15 March 2011)
(Source: Reuters)

Bank Set to Reveal That 300 Bankers Paid Average of £1m
Europe, Middle East and Africa

The Guardian reports that Royal Bank of Scotland (RBS) is set to reveal that more than 300 of its bankers are paid an average of £1m per annum and will also disclose the remuneration of five of the bank’s highest paid staff who report to the chief executive, as per disclosure requirements under the banks’ Project Merlin deal with the government on pay and lending. RBS chief executive Stephen Hester is reportedly due to get a salary deal of £7.7m.
The Guardian: RBS to reveal 300 staff each paid average of more than £1m (13 March 2011)
(Source: The Guardian)

Directors Gamble Away Company Funds
Asia Pacific

The Australian Securities and Investments Commission (ASIC) has announced that former Residential Foundation Systems directors John Anthony Maiolo and Evan Con Drakos have admitted to misusing company funds for gambling debts. Mr Maiolo pleaded guilty to two counts of falsifying accounts and one count of breaching director’s duties, while Mr Drakos pleaded guilty to two counts of breaching director’s duties.
ASIC’s media release (16 March 2011)
(Source: ASIC)