Friday, Dec. 20, 2002 | 11:21 a.m.
SUN STAFF AND WIRE REPORTS
Former penny stock promoter and Las Vegas gambling figure Robert Brennan, already serving a nine-year prison term for fraud and money laundering, was sentenced in New York to three more years Thursday for violating a judge's order freezing his assets.
Brennan pleaded guilty in August to criminal contempt, admitting he violated an April 2000 order by U.S. District Judge Richard Owen in Manhattan when he paid $500,000 to his defense lawyer, Michael Critchley. The plea followed Brennan's conviction in April 2001 for hiding $4.5 million from bankruptcy creditors.
Owen Thursday rejected Brennan's plea for leniency and tacked on another three years to the nine-year sentence he is already serving. The judge cited Brennan's run-ins with securities regulators dating to 1973 and said he'd shown no remorse.
"In today's climate of questionable executive conduct that we live in, I'm certainly not going to say to the public that this kind of conduct doesn't deserve punishment," Owen said.
Brennan, 58, said in court that he felt "categorical and unqualified remorse." He and his current lawyer, Mark Gombiner, urged Owen to have the contempt sentence run at the same time as the nine-year term he's now serving. Owen refused and imposed a consecutive sentence.
Brennan was the founder of First Jersey Securities Inc., which went out of business. After his federal conviction in Trenton, N.J., last year, he ran afoul of Owen, who presided over a 10-year civil case brought by the Securities and Exchange Commission. That case resulted in a $75 million fraud judgment against Brennan and his company.
In the New Jersey case, Brennan was convicted of hiding $525,000 in casino chips from his bankruptcy creditors and laundering money from the sale of $4 million in non-traceable bearer bonds. Authorities said he used the proceeds to travel the world by private jet and charter yachts.
Brennan had filed for Chapter 11 protection in August 1995, weeks after the SEC won the $75 million fraud judgment. Owen later placed a freeze on all of Brennan's assets that weren't included in his bankruptcy estate. The judge charged Brennan with contempt for trying to conceal from the SEC the $500,000 transfer to his lawyer's bank account.
Brennan is well known in Las Vegas as a high-rolling gambler and because of his ties to the now-imploded El Rancho hotel-casino on the Strip. A Brennan company, International Thoroughbred Breeders, at one point proposed to redevelop the dilapidated property into a new casino, but those plans fell through.
Among his bankruptcy fraud convictions, Brennan was found guilty of cashing in and failing to report as assets the $525,000 in casino chips at The Mirage hotel-casino in Las Vegas -- just three weeks after filing for bankruptcy protection in 1995.
Prosecutors were not able to prove Brennan had hoarded the casino chips despite testimony that he did not win them during a Labor Day weekend visit to Las Vegas with his girlfriend, soap opera actress Wanda Acuna.
Separately, in South Orange, N.J., the name of Brennan was ordered removed from a Seton Hall University recreation center by the school's Board of Regents this week.
The 29-member board of the Catholic university took Brennan's name off the center after agreeing to a new policy that gives it authority to erase names from facilities, said Susan Diamond, assistant vice president for university relations.
The decision comes as some universities in the U.S. turn down similar requests from students, faculty and alumni. Harvard University, Brown University, the University of Michigan and the University of Missouri are among the institutions that have stood by the honors they gave to benefactors involved in scandals at companies such as Enron Corp. and Sotheby's Holdings Inc.
"Brennan obviously was someone who had bilked innocent investors with a penny stock fraud, and that is not something a university that stands for truth and integrity should be waving around as their banner," said Jeffrey Sonnenfeld, associate dean of the Yale School of Management.
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