Friedman’s to pay $2 million to settle fraud charges | VailDaily.com
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Friedman’s to pay $2 million to settle fraud charges

WASHINGTON – Friedman’s Inc. said Wednesday that it has reached a settlement with the U.S. Justice Department under which the jewelry merchant will avoid criminal charges and pay $2 million to a fund aimed at preventing fraud.The announcement came two days after the Savannah, Ga., company settled Securities and Exchange Commission civil charges that it misled investors about its financial condtion in the period before it filed for bankruptcy protection in January 2005.A bankruptcy court earlier this week signed off on a plan that will clear the way for the jewelry store to exit Chapter 11 bankruptcy protection. Friedman’s, once the nation’s third-largest jewelry retailer, operates 400 stores in strip malls and regional malls.Federal regulators had accused senior Friedman’s executives of violating company policy from fiscal 2001 through 2003 by avoiding taking write-offs for uncollectible debts. The uncollectible bills surged after Friedman’s offered easy credit to its low- and middle-income customers, even as the jeweler publicly maintained that customers were subject to strict application guidelines, according to an SEC complaint.”We are pleased that the company has been able to resolve these matters on fair terms with both the US Attorney’s Office and the SEC,” said Larry Byrne, a partner at White & Case, in a statement.Vail, Colorado


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