Boston, MA 08/21/2114 (wallstreetpr) – Specialty retailer of casual apparel, Aeropostale Inc (NYSE:ARO)’s former executive has been convicted of defrauding the company by the U.S. District court in Brooklyn as the merchandising personnel was charged with taking of over $25 million bribes from a vendor.
Sentenced To Jail
The ex-employee had been sentenced to eight years of jail following the conviction by the Judge Roslynn Mauskopf. The Judge had also ruled that Christopher Finazzo, an ex-vice president and chief merchandising officer, pay $13.7 million to the company in compensation apart from forfeiting over $25 million, Reuters reported.
The Aeropostale Inc (NYSE:ARO) lawyer had charged Finazzo as having abused his position of power and betrayed the belief placed on him by Aeropostale, its employees, and its investors by filling up his purses at the cost of his employer.
After a three-week trial, the former chief merchandising officer of the company was found guilty on 14 counts of fraud such as wire fraud and mail fraud apart from conspiracy in April 2013.
Background Of Case
The company and the prosecutor have charged Finazzo of having struck an illegal agreement with the owner of South Bay Apparel Inc and a movie producer, Douglas Dey. South Bay was a big clothing supplier once upon a time for Aeropostale Inc (NYSE:ARO).
Between 1996 and 2006, the prosecutors blamed him for buying over $350 million T-shirts and swindle some items from South Bay on Aeropostale behalf in return of about 50% vendor’s profits. The deal had allowed the ex-executive to accumulate over $25 million of kickbacks from South Bay by hiding the transactions from both the company and its investors. The prosecutor have charged that this had prevented from seeking better quality or lower price merchandise from any other vendor.
In 2012, Douglas Dey had pleaded guilty of conspiring travel act violation and was sentenced to three and half years in prison on August 6.
Appeal
The former employee’s lawyer, Robert Zito, disclosed that his client would go in for an appeal while Aeropostale Inc (NYSE:ARO) preferred not to comment on the issues.
