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By Nate Raymond
NEW YORK, April 22 (Reuters) - A former senior vice president at Bank of America Corp who became a cooperating witness in the U.S. government’s probe of bid-rigging in the $3.7 trillion municipal bond market avoided prison time or other punishment at his sentencing on Tuesday.
Douglas Campbell, who marketed investment agreements and other municipal finance contracts while working in the bank’s New York office, in 2010 pleaded guilty to three counts of conspiracy to restrain trade, conspiracy and wire fraud.
At a hearing in Manhattan, U.S. District Judge Kimba Wood issued a sentence that included no jail time, probation or monetary penalty. She said Campbell deserved leniency for cooperating with federal investigators for more than eight years.
“He helped the government shape the case and led the government to other cooperators,” Wood said.
Campbell, 48, became the seventh person to plead guilty in connection with the antitrust investigation, which has since resulted in numerous convictions and $743 million in settlements with Bank of America, UBS AG, General Electric Co, JPMorgan Chase & Co and Wells Fargo & Co.
Bank of America’s 2010 settlement with federal and state was for $137.3 million. The bank last year agreed to pay $20 million to resolve a related class action.
The Justice Department said Campbell engaged in the bid-rigging scheme from at least 1998 until 2005, designating with others in advance who would be the winning bidder for investment agreements and municipal contracts brokered by Beverly Hills, California-based CDR Financial Products.
Prosecutors said Campbell, who worked at the bank from 1998 until 2002, also would intentionally submit losing bids to CDR, giving the false impression of a competitive bidding process.
“I want to assure the court that I recognize the seriousness of my conduct,” Campbell said in court. “I surely do.”
CDR founder David Rubin, who also cooperated with investigators, was sentenced in March to two years probation and ordered to pay up to $5.65 million in fines and restitution after pleading guilty to wire fraud and conspiracy.
Campbell testified against three former UBS executives -Peter Ghavami, Gary Heinz and Michael Welty - who were convicted in 2012 for participating in frauds related to municipal bond proceed contracts.
Court records show Campbell was expected to testify against Phillip Murphy, a former managing director of Bank of America’s municipal derivatives desk indicted in 2012.
But in February, Murphy pleaded guilty to conspiring to make false entries in reports and other papers sent from his desk to bank management.
The case is U.S. v. Campbell, U.S. District Court, Southern District of New York, No. 10-cr-00803. (Reporting by Nate Raymond in New York; Editing by Cynthia Osterman)