New Haven Independent

Chance M. Voughtwas a minor player in a big scheme by which outside investors took advantage of depositors at New Haven Savings Bank, buying stock in their names in a closed initial offering in order to turn a massive profit when the bank’s stock went public in March 2004.

Vought, who’s 57, was sentenced to one day in prison, with orders to pay a fine of $5,000. His court appearance drew few viewers: The first-floor courtroom held three Vought supporters, three reporters, and lots of empty benches. Vought is the first in a series of men to be sentenced in the scheme. His punishment will likely pale in comparison to more involved cohorts, such as middleman John Lucarelli, who was found guilty by trial, and faces up to 185 years in jail.

Though Vought was a little fish in the bigger plot, Arterton wouldn’t let him wriggle away without properly owning up to what he did.

Vought has pleaded guilty to one count of security fraud. He shared an office with the scheme’s mastermind, Robert Ross, who arranged for outside investors to profit from stocks they weren’t legally entitled to — before the conversion, NewAlliance stocks were available to depositors only.

Over the course of about a month, Vought wired a total $758,000 to Ross to be used to illegally buy stocks in depositors’ names, then reap a hefty 50 percent profit when the bank went public. Vought has already paid back $315,799 to the Securities and Exchange Commission on a separate civil case. Click here for a U.S. Attorney’s office’s release on Vought.

Vought’s attorney, Sarah Gold, said her client’s decision to chip in on the deal was “a marked deviation from an otherwise lifelong, law-abiding life.” She framed him as an unknowing depositor who “did not intend for anyone to suffer any loss.” “He did not know the details of this transaction.” Vought wasn’t involved in recruiting depositors; he just gave Ross money, said Gold.

But Judge Arterton pushed for more accountability. Speaking directly to Vought, she noted that in making other investments, Vought would research where the money would go, and how the profit would be generated. With the NHSB investment, “What happened?”

“I didn’t do the due diligence I should have, I guess,” said Vought, who wore a dark suit with combed-back gray hair.

Arterton pressed the defendant. She questioned if his moral compass — a compass which colleagues testified as normally very trustworthy — had gone off. “Apparently you could have been aware that this deal could not have been consummated legitimately.”

Vought pleaded ignorance: “I was not aware of the kind of deal that it was. I simply didn’t think of it.”

Arterton: You must have known there was something wrong.

Vought: “I knew there was something that was out there that was wrong about it.”

Arterton; “You were pretty sure that the deal was not legal.”

Vought caved: “Yes, your honor.”

Questioning complete, Arterton read him his sentence.

The prosecutors, Assistant United States Attorney Michael S. McGarry and David A. Ring, left the sentencing up to Arterton, giving no special recommendation.

Citing Vought’s poor health, the defense had asked for a sentence on the lower end of the sentencing guidelines, which suggested zero to six months. Arterton granted that request, giving him just one day in prison, to be followed by three years of supervised release, during which his financial records may be viewed by authorities.

Vought, accompanied by his wife and two business associates, declined comment after court. He ducked back into the courthouse to avoid a camera, then darted across the street.