Ex-Tiffany Executive Gets Prison in $2.1 Million Theft
A former Tiffany & Co. (TIF) executive who stole jewelry including diamond rings and bracelets worth $2.1 million over eight of her almost 25 years at the luxury retailer was sentenced to a year and a day in prison by a federal judge who called her crime “inexplicable.”
The sentence was less than a third of the term sought by federal prosecutors for Ingrid Lederhaas-Okun, 47, who was a vice president of product development and design.
“I can’t express my remorse enough,” Lederhaas-Okun, weeping, told U.S. District Judge Paul Gardephe today in Manhattan.
Lederhaas-Okun pleaded guilty in July to one count of interstate transportation of stolen property, admitting that she stole at least 165 pieces of jewelry, including diamond rings, bracelets and diamond earrings, and sold them to a jewelry reseller.
Gardephe rejected prosecutors’ request that Lederhaas-Okun be given a term within sentencing guidelines, which called for 37 months to 46 months in prison. Lederhaas-Okun’s lawyer, Sabrina Shroff of the Federal Defenders of New York, asked Gardephe to give her client six months, citing her history of depression, aggravated by work disappointments and an inability to conceive a child.
The sentencing comes as Tiffany learned it must pay an arbitration award of about 402 million Swiss francs ($449 million) to Swatch Group (UHR) AG after the timepiece maker claimed a breach of contract at their joint venture.
Swatch and Tiffany became embroiled in a legal battle in 2011 after the biggest maker of Swiss timepieces alleged the U.S. jeweler blocked development of their partnership. Tiffany said it honored obligations under the terms of the alliance the two companies had begun almost four years earlier, when they agreed to develop and sell watches under the Tiffany brand and share the profit.
Last month, Tiffany posted third-quarter profit that topped analysts’ estimates and boosted its annual earnings forecast, helped in part by higher prices and falling precious metal costs. The $449-million award doesn’t affect the company’s prospects, according to two analysts.
Lederhaas-Okun’s job gave her authority to check out jewelry for work-related purposes. She was fired in February “as part of an overall downsizing” at the company, according to the criminal complaint filed against her.
After she was fired, Lederhaas-Okun gave false explanations for what had happened to the missing jewelry, including that she had left it in her office and that it was lost or damaged.
She later admitted that she first stole a pendant from Tiffany in 2005. Over the next eight years, she stole jewelry items, sold them and kept the money.
“Instead of confronting the problem and her growing depression, she bottled up every last feeling that was eating away at her; whenever she felt down or depressed, she stole,” Shroff said in a sentencing memorandum filed with the court.
Three weeks after her arrest, Lederhaas-Okun’s husband said he was seeking a divorce, Shroff said.
In addition to the prison term, Gardephe ordered Lederhaas-Okun to serve a year of supervised release. She also must forfeit $2.1 million and pay $2.2 million in restitution.
Lederhaas is turning all her assets over to the government, including her share of the equity in a $4.4 million house in Darien, Connecticut, that she had shared with her ex-husband, her bank accounts and retirement savings, Shroff said.
Gardephe agreed to a defense request that Lederhaas-Okun serve her sentence in the minimum-security prison camp in Alderson, West Virginia. Prisoners at the camp have included Martha Stewart, the Martha Stewart Living Omnimedia Inc. (MSO) founder jailed for lying about a stock sale, and Danielle Chiesi, a former securities analyst who pleaded guilty to insider trading.
The case is U.S. v. Lederhaas-Okun, 13-cr-00560, U.S. District Court, Southern District of New York (Manhattan).
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