The trial of Bradley Stinn, former chief executive officer of Friedman's Inc. and its affiliate Crescent Jewelers, for accounting fraud is set to begin on Monday in Brooklyn federal court.
The trial, before Judge Nina Gershon, is expected to last four to six weeks, according to the U.S. attorney's office in Brooklyn. The opening statement from the government will be on Feb. 5.
Stinn was charged last March with lying to investors about Friedman's financial performance to make reported results appear more positive than the company's actual results. A government investigation, initiated after the company restated four years of financial figures, led to the resignation of Stinn and the company's chief financial officer, Victor M. Suglia. Stinn resigned in 2003. Friedman's former cfo and former controller had already pled guilty to charges when Stinn's indictment was unsealed in March. The firm filed for Chapter 11 bankruptcy protection in January 2005.
When the alleged fraud was occurring Friedman's was the third-largest fine jewelry retailer in the U.S. The company at one time operated 686 stores in 20 states. The company was known for its diamond jewelry, in particular its diamond engagement and wedding rings.
Under Stinn, Friedman's allegedly encouraged employees to increase sales volume by steering customers toward its credit program. Allegedly half of the firm's $400 million in annual sales were made on credit. The fraud scheme was established partly to cover the company's inability to collect on those credit accounts, prosecutors said.
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