Adam Gilburne, the former president of Just for Feet stores, was sentenced by Chief United States District Judge U.W. Clemon to 60 months probation and must pay a $1,000.00 fine and $389,000.00 in restitution. This sentencing follows his May 2004 guilty plea to one count of conspiracy to commit wire fraud and securities fraud. Gilburne, who joined the JFF corporate team in 1994 after the company bought out his franchise operation, was easily recognized as the carnival barker at most Just for Feet grand openings. He was president of the Superstore Division until the company imploded.
According to the U.S. Attorney prosecuting the ongoing case, Gilburne and others devised a scheme to artificially inflate JFF's financial condition through the improper recognition of income received from Rogers Advertising, which was owned by another Ruttenberg family member. As a result of the scheme, the company's income was overstated by $3 million for fiscal year 1997, and overstated by $5.3 million for fiscal 1998.
Gilburne could have been sentenced up to five years in prison and received a $250,000 fine on the charges of conspiracy to commit wire fraud and securities fraud.
Don Ruttenberg, former JFF EVP and son of the retailers founder, and Steven Davis, the former VP of Marketing for the company, are scheduled to be sentenced tomorrow, July 27, 2004. The two are the last two individuals charged in the case and both have entered guilty pleas. So far, no one charged has gone to trial and only one individual (and the first to be sentenced) has received jail time.
