Aeropostale Jury Asked to Convict Ex-Merchandise Chief

Aeropostale Inc. (ARO)’s former top merchandise executive struck a secret business deal with one of the retailer’s largest vendors and should be convicted of fraud, a federal prosecutor told a jury.

Closing arguments began today in the two-week trial in Brooklyn, New York, over Christopher Finazzo’s business arrangement with Douglas Dey, a friend and controlling owner of South Bay Apparel Inc.

Assistant U.S. Attorney John Nowak argued that Finazzo, 57, cheated his company by directing about $350 million worth of orders to Dey, with whom he split profits. The partnership netted Finazzo about $25 million in extra cash over a decade, the government alleged.

“He wanted to cover up the kickback scheme,” Nowak said before U.S. District Judge Roslynn R. Mauskopf. “Those lies are evidence of his guilt.”

Prosecutors brought 16 charges against Finazzo, including conspiracy, mail fraud and wire fraud. The former executive faces a maximum sentence of 20 years in prison if convicted of a fraud count.

The case is U.S. v. Finazzo, 10-cr-00457, U.S. District Court, Eastern District of New York (Brooklyn).

To contact the reporter on this story: Christie Smythe in Brooklyn at csmythe1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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