By  on August 20, 2014

NEW YORK — Christopher Finazzo, Aéropostale Inc.’s former chief merchandising officer, now knows his fate: eight years in prison.

Finazzo, 58, was indicted in 2010 in connection with a multimillion-dollar kickback scheme involving one of the retailer’s key vendors, South Bay Apparel.

According to U.S. Attorney Loretta E. Lynch in Brooklyn, Finazzo was also sentenced to three years’ supervised release and ordered to pay $13.7 million in restitution to Aéropostale. That’s on top of the $25.8 million that Finazzo has to forfeit to the government.

Lynch said, “For over a decade, Christopher Finazzo abused his position of power at Aéropostale and betrayed the trust placed in him by the company, its investors and its employees by lining his own pockets at his employer’s expense. To succeed in this decade-long kickback scheme, Finazzo lied on numerous disclosure forms and caused Aéropostale to make false filings with the Securities and Exchange Commission. These lies and false representations compromised the financial well-being of a publicly traded retail company. Those who seek to commit corporate fraud by abusing their positions of trust are on notice that they will be held accountable for their crimes.”

Government prosecutors in a three-week trial last year presented evidence that Finazzo directed more than $350 million in orders while at Aéropostale to South Bay and in turn received more than $25 million in illegal kickbacks from the vendor. Prosecutors took two weeks to present their case, which included cross-examination of their witnesses by defense counsel. The defense needed just a day and a half to present its case.

Jurors in the criminal fraud trial took just four hours to deliberate before returning guilty verdicts on 14 counts of mail fraud, one count of wire fraud and one count of conspiracy. Then in a special verdict as part of the forfeiture phase of the proceeding, the jurors determined that Finazzo was to forfeit almost $25.8 million, including real estate.

Finazzo never took the stand, which is the right of criminal defendants as they are presumed innocent of all charges and it is up to U.S. government prosecutors to prove guilt beyond a reasonable doubt.

The maximum term of imprisonment for each count of mail and wire fraud is 20 years and five years for the conspiracy charge. Some legal sources said last year that there was a possibility U.S. District Court Judge Roslynn R. Mauskopf wouldn’t impose the maximum, given Finazzo’s age.

The key components in the government’s case are that Finazzo deprived the retailer of money that could have gone elsewhere and that he interfered with Aéropostale’s ability to decide how to control their own assets, such as whether to place orders with South Bay or somewhere else.

One of the witnesses who testified for the government was Julian Geiger, who was chief executive officer of the teen retailer at the time and who this week rejoined the company in the same post.

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