X hits on this document

92 views

0 shares

0 downloads

0 comments

13 / 40

business.  Stockman determined what the terms of the rebate agreement would be and Galante negotiated the agreement with Reko.  Galante arranged for the rebate to be described in one letter and the guarantee of future business to be expressed in a separate letter. Cosgrove approved the use of the two letters, and Stockman and Stepp knew that Reko was providing a side letter not referring to the future business contingency.  C&A recognized the anticipated $250,000 rebate during the fourth quarter of 2003 as if there were no contingency.  Stockman, Stepp, Galante and Cosgrove knew, or were reckless in not knowing, that this recognition was improper and designed to inflate C&A’s income.

36.In June 2004, C&A negotiated a $1.5 million rebate from GE Advanced Materials (“GE”) contingent on future purchases.  At C&A's request, GE signed a side letter intended to hide the contingency.  C&A then demanded and received a revised version of the side letter, in order to better hide the true terms of the agreement.  Stockman knew that the anticipated GE rebate was contingent on future purchases and that C&A was nevertheless recognizing the rebate in the second quarter of 2004.  The GE agreement eventually fell apart, C&A did not provide GE the promised business, and GE never paid the rebate.  Nevertheless, C&A retained the previously recorded rebate on its books with Stockman’s knowledge and approval.     

37.In mid-2004 Stockman drew the Fabrics Division into the rebate scheme.  During a meeting in North Carolina in May 2004, Stockman directed the Fabrics Division to solicit rebates based on future business but paper the transactions to justify the immediate recognition.  In the second quarter of 2004, the Fabrics Division improperly recognized a $200,000 rebate from Unifi, a $150,000 rebate from M. Dohmen, U.S.A., Inc., and a $49,000 rebate from Clariant Corporation, in each case

Document info
Document views92
Page views92
Page last viewedSat Dec 03 05:04:21 UTC 2016
Pages40
Paragraphs377
Words10045

Comments