Federal Jury Convicts Former Friedman’s Head - May.2008

A federal jury in New York convicted Bradley Stinn, the former chief executive officer at Friedman’s, Inc. and its affiliate, Crescent Jewelers, of securities fraud, mail fraud, and conspiracy, for his participation in what federal prosecutors call a "massive accounting fraud scheme designed to inflate Friedman’s financial performance."

The jury also returned a forfeiture verdict against Stinn for more than $1 million.

Stinn, 47, will face a maximum sentence of 25 years’ imprisonment on the most serious charge. He will be sentenced in July.

The government’s investigation also resulted in the guilty pleas of Friedman’s and Crescent’s former chief financial officer and Friedman’s former controller, and the execution of non-prosecution agreements by Friedman’s and Crescent, pursuant to which the companies agreed to forfeit $3 million, cooperate fully with the government’s investigation, and adopt significant corporate reforms to prevent recurrence of the fraud.

The two companies are currently operating in Chapter 11. v