X hits on this document





10 / 40

part of this scheme, C&A's Purchasing Department arranged for suppliers to create false or misleading documents stating that the rebates were based on past purchases.  The false documentation was held by C&A for use in the event auditors questioned its recognition of the rebate in income.  

28.One of the first fraudulent rebates C&A’s Purchasing Department negotiated was from PPG Industries, Inc. (“PPG”), a paint supplier.  In April 2002, PPG agreed to pay C&A a rebate in exchange for a specified volume of new business.  At the direction of C&A's finance department, Barnaba worked with the Purchasing Department to solicit a side letter from PPG falsely stating that the rebate was based on past purchases.  This letter provided a pretext for C&A's immediate recognition of the full amount of the rebate ($500,000) in the second quarter of 2002.  Barnaba knew that the purpose of obtaining the side letter was to allow C&A to account for the rebate improperly. The PPG side letter became the template used in preparing side letters for subsequent rebate transactions.  

29.C&A extended the rebate scheme to several other Plastics Division agreements during the remainder of 2002.  C&A improperly recognized income based on rebate agreements with, among others, Brown Corporation ($900,000 rebate recognized in Q3 2002), Jackson Plastics, Inc. ($138,750 rebate recognized in Q3 2002), Flambeau Corporation ($235,000 rebate recognized in Q3 2002), ATC, Inc. ($123,470 rebate recognized in Q4 2002), Pine River Plastics, Inc. ($67,000 rebate recognized in Q4 2002),  and (again) Jackson Plastics, Inc. ($46,250 rebate recognized in Q4 2002).      

30.By the first quarter of 2003 it was standard operating procedure for C&A's Purchasing Department to solicit false or misleading side letters in connection with

Document info
Document views86
Page views86
Page last viewedThu Oct 27 19:57:04 UTC 2016