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19.Christopher M. Williams ("Williams") joined C&A in 2000 as Director of Commercial Management for its contracts with Ford Motor Company.   He was the Executive Vice President of the Business Development and Specialty Products groups from November 2004 through May 2005.  Williams left C&A in January 2006.  He resides in Troy, Michigan.    

      FRAUDULENT ACCOUNTING FOR SUPPLIER PAYMENTS

20.Heartland purchased a controlling interest in C&A in February 2001.  Later that year C&A began inflating its earnings by engaging in round-trip transactions with McCallum.  The next year C&A began immediately recognizing rebates (on purchases of raw materials) to which C&A was not then entitled.  By 2004, C&A was also improperly recording rebates on purchases of capital equipment.  These fraudulent schemes were designed in part to create the appearance that C&A's financial performance was improving under Stockman's direction.

A.Round-Trip Transactions With McCallum

21.The fraudulent accounting for supplier payments began in late 2001 when C&A sought $3 million from McCallum to increase C&A's income for the fourth quarter.

22.  Also in March 2002,  Stockman agreed to buy one of McCallum's businesses (Southwest Laminates) for more than its actual value, in exchange for future "rebate" payments to C&A from another McCallum company (Joan Fabrics).  C&A then purchased Southwest Laminates for $17 million, at least $7 million more than C&A estimated it was worth.  In return, McCallum agreed that Joan's Fabrics would pay C&A almost $7 million in rebates that could be improperly recognized in income.

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