Former Friedman's CEO Convicted of Fraud
By Rob Bates -- JCK Online, 5/1/2008 2:00:00 AM
A federal jury in New York recently convicted Bradley Stinn, the former chief executive officer at Friedman's and its Crescent Jewelers affiliate, of securities fraud, mail fraud, and conspiracy. The jury also returned a forfeiture verdict against Stinn for more than $1 million.
Stinn, 47, faces a maximum sentence of 25 years' imprisonment on the most serious charge. Sentencing was set for July 9.
The government's investigation also resulted in guilty pleas by Friedman's and Crescent's former chief financial officer and Friedman's former controller, a statement from the U.S. Attorney's office said.
Stinn was charged with concealing that his company was increasingly unable to collect money owed by customers who bought jewelry on credit, because the company didn't follow its own credit-granting guidelines, prosecutors said.
To cover up the collection problems, prosecutors said, Stinn "caused Friedman's quarterly reported credit statistics to understate the delinquency of its credit portfolio, and caused Friedman's to report false earnings numbers." In some cases, the false earnings reported by Friedman's met or exceeded the public estimates of professional stock analysts and resulted in the artificial inflation of Friedman's stock price.
In a Web post, a seemingly knowledgeable person, self-identified as a juror on the Stinn case, said the evidence was clearly against him. "I think Stinn was an aggressive, knowledgeable businessman whose goal was to build a successful business chain," the person wrote. "Nothing wrong with that, but when things weren't working out as he needed them too, he was willing and able to cut corners and deceive the public in order to accomplish his goal.
"I took no joy in finding him guilty, but we took a good hard look at the evidence and could come to no other fair conclusion," the person said. "Justice was done, but it's fine with me if mercy follows."
