Tim McCool, director of apparel sales for adidas America, has agreed to plead guilty to a conspiracy charge involving Just for Feet. The U.S. Attorney's Office in Birmingham, AL confirmed that McCool had been charged with conspiracy to submit false statements and falsifying books and records in the JFF bankruptcy case.
The infraction carries a maximum penalty of five years and a $250,000 fine.
As part of the deal, McCool said he would cooperate with the federal government's ongoing investigation into Just for Feet's finances. A hearing on McCool's plea was not immediately scheduled.
The case stems from the audit that was conducted by of Deloitte & Touche as part of the bankruptcy proceedings started in 1999 and subsequent auction of assets in 2000. The audit required JFFs vendors to provide “independent confirmation of amounts owed” to JFF.
A Reuters report said that the U.S. Attorneys office had indicated that “McCool allowed auditors to believe that the unit of adidas-Salomon AG owed Just for Feet $2.2 million, when in fact it had only owed the retailer $40,000 as of Jan. 30, 1999”.
adidas, to its credit, is standing by McCool, a long-time three-striper.
“The employee made an imprudent mistake many years ago when he signed a document without fully understanding how the information was going to be misused. Tim McCool is a valued and honest employee who is now paying a public price for this error”, adidas America said in a statement in the report.
Word is that other sales execs received similar documents that are currently under investigation. We hear the feds have been interviewing other vendors top sales officials and regional representatives that dealt with Just for Feet.
The case stems from the ongoing investigation of Just for Feets former executives that allegedly inflated JFFs earnings by documenting advertising “rebates” from the company's advertising firm in an effort to meet Wall Street analysts' earnings expectations. The company also allegedly booked as revenue vendors contribution to the cost of fixturing in-store brand areas.
This case is the first known plea arrangement by any vendor representative since the JFF business imploded. Former JFF president Adam Gilburne did plead guilty to securities fraud in May.
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