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2 Executives charged in 'sweetheart deal'
NEW YORK, (UPI) -- The U.S. Justice Department said Monday it had indicted a former Aeropostale Inc. executive and the owner of a supply company on fraud and theft charges.
The charges, unsealed in a federal court in Brooklyn, say Christopher Finazzo, former executive vice president and chief merchandising officer for Aeropostale, was paid $14 million for channeling $350 million in business to South Bay Apparel Inc., owned by Douglas Dey, who was also indicted.
U.S. Attorney Loretta Lynch said, Finazzo and Dey "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."
The secrecy of the arrangement caused Aeropostale to make erroneous filings with the Securities and Exchange Commission, the Justice Department said.
"Finazzo and Dey allegedly entered into a sweetheart deal that was essentially a kickback scheme -- Finazzo funneled a third of a billion dollars in purchases to Dey's company and personally got millions in return," FBI Acting Assistant Director-in-Charge George Venizelos in a statement.
The charges include 28 counts of mail and wire fraud, money laundering conspiracy, and conspiracy to violate the travel act. Each count carries a maximum sentence of 20 years imprisonment, the Justice Department said.
NEW YORK, (UPI) -- The U.S. Justice Department said Monday it had indicted a former Aeropostale Inc. executive and the owner of a supply company on fraud and theft charges.
The charges, unsealed in a federal court in Brooklyn, say Christopher Finazzo, former executive vice president and chief merchandising officer for Aeropostale, was paid $14 million for channeling $350 million in business to South Bay Apparel Inc., owned by Douglas Dey, who was also indicted.
U.S. Attorney Loretta Lynch said, Finazzo and Dey "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."
The secrecy of the arrangement caused Aeropostale to make erroneous filings with the Securities and Exchange Commission, the Justice Department said.
"Finazzo and Dey allegedly entered into a sweetheart deal that was essentially a kickback scheme -- Finazzo funneled a third of a billion dollars in purchases to Dey's company and personally got millions in return," FBI Acting Assistant Director-in-Charge George Venizelos in a statement.
The charges include 28 counts of mail and wire fraud, money laundering conspiracy, and conspiracy to violate the travel act. Each count carries a maximum sentence of 20 years imprisonment, the Justice Department said.
