Ex-Aeropostale executive convicted on fraud charge

Aeropostale

Former Aeropostale executive vice president and chief merchandising officer Christopher Finazzo has been convicted of defrauding the company and taking more than $25 million in kickbacks from a key vendor.

The Department of Justice said that Finazzo entered into an illegal deal with Douglas Dey, the owner of South Bay Apparel Inc, which was a major supplier to the retailer.

Under the agreement, Finazzo caused Aeropostale to buy more than $350 million in merchandise from South Bay in exchange for payments from Dey of around 50% of South Bay’s profits.

Throughout the course of the scheme, Finazzo and Dey concealed the kickbacks from Aeropostale and its employees, causing Aeropostale to lose profits and negatively impacting employee bonus amounts, the Department of Justice said.

“We have all heard the saying ‘money does not buy happiness,’ and today’s verdict is case in point for that maxim. Christopher Finazzo had a great job that paid him millions of dollars, but this honest living was apparently not enough to satisfy his greed,” said US Attorney Loretta Lynch.

“As the evidence at trial showed, he schemed to steal from Aeropostale and to receive more than $25 million in illegal kickbacks from a supplier.”

Finazzo has been convicted on 16 counts for defrauding the retailer and faces a sentence of up to 25 year imprisonment for each of the 14 counts of mail fraud, and the one count of wire fraud, and up to five years’ imprisonment for the conspiracy count.

Co-defendant Douglas Dey, who pleaded guilty, faces a maximum sentence of five years’ imprisonment.

For more fashion and apparel industry news, go to just-style.com

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