September 29, 2004
Jewelry Executives Settle Suit, Face Prison
Whitehall Jewellers, Chicago, agreed to pay $13 million to settle a
lawsuit and a federal investigation into fraud charges, according to
company Securities and Exchange Commission filings. Former Chief
Financial Officer Jon Browne pleaded guilty Tuesday to federal
bank and wire fraud conspiracy charges. He faces up to 30 years in
prison and a $1 million fine, according to the Associated Press.
On Sept. 28, the U.S. Attorney's Office in Brooklyn, NY, said Whitehall, in a
written agreement with the government, accepted responsibility for
improper conduct by former executives and adopted significant corporate
reforms to prevent similar conduct in the future.
In the case, Whitehall was sued by financing company Capital Factors
Inc., which claimed the Chicago-based jeweler aided the now defunct New
York-based gem supplier Cosmopolitan Gem Corp. in a $20 million
accounting fraud. Two former Cosmopolitan employees, who aided
Browne, face up to 30 years in prison when they are sentenced in March.
Whitehall has 386 stores in 38 states.
by Michael Thompson