Bradley Stinn, Former Friedman’s CEO, Indicted

Bradley Stinn, 47, the former chief executive of Friedman’s and Crescent Jewelers, has been indicted for allegedly lying to shareholders about Friedman’s financial performance.

Charges include conspiracy, securities fraud, making false filings with the Securities and Exchange Commission, mail fraud, and certification of a false financial report. If convicted of all charges, he could face up to 30 years in prison.

Stinn and Friedman’s chief financial officer resigned in November 2003 amid a government investigation of the chain’s financial records. The company eventually had to revise its financial statements for the years 2001 through 2003. It filed for Chapter 11 in January 2005.

Friedman’s and Crescent’s former chief financial officer and Friedman’s former controller have pled guilty in the investigation, the U.S. Attorney’s office said. In addition, in 2005 Friedman’s settled civil charges with the SEC and agreed to pay $2 million in a settlement in which it avoided criminal prosecution.

According to the indictment, Friedman’s, then the third-largest jewelry chain in the country, was unable to collect on credit sales due to relaxed guidelines. Stinn and other executives allegedly falsified the company’s accounting data to conceal these problems from investors, which led to an artificially inflated stock price.

Stinn’s lawyer, David Shapiro, did not return a call from JCK but told the Associated Press: “Brad intends to defend himself at the trial. He’s innocent of these charges. Friedman’s was and still is a successful jewelry company, which Brad helped to build. The government pushed it into bankruptcy as the result of its three-and-a-half-year investigation.”