A former top executive at Tommy Hilfiger’s handbag licensee pleaded guilty Tuesday to mail and wire fraud in the theft of more than $19 million from the company.

This story first appeared in the September 17, 2008 issue of WWD. Subscribe Today.

Martin Bodner, who was chief financial officer of Tommy Hilfiger Handbags and Small Leather Goods Inc., secretly increased his compensation package in his role as payroll supervisor, filed to be reimbursed for fake expenses, issued hundreds of company checks for personal expenses and put one of his sons on the payroll in a no-show job, according to documents filed in federal court in Manhattan.

The schemes were carried out between the middle of 2000, when Bodner was hired as cfo, until his arrest in December 2007 after an investigation by the FBI. Bodner, 60, was charged with the crimes last March.

Bodner had the company issue checks to pay for his own and his family’s credit card bills, his car, homeowner and auto insurance and a decorator. In 2004 and 2005, the company paid the son, who was not identified in court papers or criminally charged, about $225,500.

Court documents revealed just how damaging the theft was to the company. The handbag firm reported a net loss of $3.76 million during fiscal 2007, which included three quarters of the 2006 calendar year. Bodner stole about $3.5 million in 2006.

Bodner faces a maximum sentence of 40 years in prison if convicted. The U.S. Attorney’s office, in light of the guilty plea, recommended between 5.25 and 7.5 years of imprisonment. Bodner, who had no previous criminal record, will forfeit a home in Sands Point, N.Y., a Midtown Manhattan apartment, three cars, various other properties and at least $477,000 in accounts in his family members’ names.

He will be sentenced on Nov. 5 by Judge P. Kevin Castel.

Bodner’s attorney did not return a call seeking comment. A representative at a number listed under Tommy Hilfiger Handbags said the company had no comment.

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