US: Former clothing execs face fraud charges
Christopher Finazzo, the former executive vice president and chief merchandising officer of US retailer Aeropostale, and Douglas Dey, the owner of South Bay Apparel, previously a major supplier of Aeropostale, face charges of mail and wire fraud, money laundering conspiracy, and conspiracy to violate the travel act.
According to a statement by the US Department of Justice, a 28-count indictment was unsealed on Friday (11 June) in a Brooklyn federal court
Finazzo is also charged with causing Aeropostale to make a false statement in a report that was filed with the Securities and Exchange Commission (SEC).
The US Department of Justice said that as alleged in the indictment, Finazzo and Dey entered into a fraudulent scheme in which Finazzo caused Aeropostale to buy more than $350m in merchandise from South Bay in exchange for payments from Dey of approximately 50% of South Bay's profits.
Dey allegedly paid Finazzo more than $14m through C&D Retail Consultants, a company controlled by Finazzo, and the balance he invested in joint ventures with Finazzo, it is claimed. According to the indictment, the defendants concealed their scheme from Aeropostale and its employees.
"The defendants allegedly entered into a fraudulent arrangement to steal millions of dollars from Aeropostale while at the same time causing Aeropostale to make false statements to its shareholders," stated US Attorney Lynch. "We will aggressively pursue and prosecute those who use their positions of influence and trust in senior management to steal from their companies and the companies' shareholders."
If convicted, the maximum term of imprisonment for each count of mail fraud, wire fraud, money laundering conspiracy, and making a false statement is 20 years, the statement added.
The government's case is being prosecuted by Assistant US Attorneys Winston M Paes, William E Schaeffer and Claire Kedeshian.
The charges announced are merely allegations, and the defendants are presumed innocent unless and until proven guilty, it added.
The following is a general roundup of US apparel and shoe chains' October 2010 sales results. The list will be updated as new results become available. ...
The following is a general roundup of US apparel and shoe chains' September 2010 sales results. The list will be updated as new results become available. ...
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