Whitehall Jewellers Under Criminal Investigation
October 02, 03
Whitehall Jewellers disclosed that it is under criminal investigation by the US Attorney for the Eastern District of New York in connection to the Capital Factors lawsuit filed in August against 14 companies including Whitehall Jewellers and Cosmopolitan Gem Corp.
Capital Factors alleges that Cosmopolitan together with the other 13 companies defrauded it into advancing money to Cosmopolitan by misrepresenting it's finances and the profitability of its operations.
Capital also alleges that Whitehall, along with others, including other jewelry retailers, aided or participated in the alleged fraud.
The investigation comes in addition to a Securities and Exchange Commission (SEC) informal inquiry into the same matters.
Whitehall reported it was informed earlier this week of the US Attorney investigation and that it is cooperating with both the SEC and the office of the US Attorney. Pending developments in the investigation and inquiry, John Desjardins, the company's former CFO and current Executive Vice President, has re-assumed the responsibilities of CFO on an interim basis.