Former CEO of publicly traded company convicted in accounting fraud scheme -failure to account for bad accounts receivable and bad customer credit

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It appears that the actions by company management to prop-up earnings by not properly accounting for bad accounts receivable and bad customer credit is considered a very serious offense - up to 25 year jail sentence.



FORMER CHIEF EXECUTIVE OFFICER OF FRIEDMAN’S INC. AND CRESCENT JEWELERS CONVICTED IN ACCOUNTING FRAUD SCHEME

http://www.usdoj.gov/usao/nye/pr/2008/2008mar25.html

"... When sentenced by United States District Judge Nina Gershon on July 9, 2008, STINN will face a maximum sentence of 25 years’ imprisonment on the most serious charge...

...A major aspect of the fraud scheme was concealing that Friedman’s was increasingly unable to collect money owed by customers who bought jewelry on credit...

...To cover up the collection problems, STINN caused Friedman’s quarterly reported credit statistics to understate the delinquency of its credit portfolio, and caused Friedman’s to report false earnings numbers..."




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