This week saw one of the strangest stories ever to hit Tradsville, something as could only befit the year of our lordless 2020.
Alden, maker of ultra-conservative footwear crafted in New England, has filed a lawsuit against its former VP and CFO for allegedly embezzling $27 million from the company, $15 million of which was funneled to a person by the name of Bianca de la Garza, founder of Lucky Gal Productions.
Reports the Boston Globe:
According to the court filings, [Richard Haijar] bought a $1.1 million New York City co-op apartment for de la Garza using money stolen from the company and purchased other extravagant gifts, including a Mercedes-Benz, diamond jewelry, and designer handbags and clothing. The court has approved the company’s seizure of Hajjar’s assets held in seven banks and financial services companies, excluding his pension.
The court documents indicate that Alden, a New England footwear stalwart founded in 1884, hired Hajjar in 1987. According to the filings, Hajjar’s father had been the CPA for the father of the company’s current president, Arthur S. Tarlow Jr., and Hajjar’s two brothers worked for the company. Trust ran deep between the two families.
You’re probably wondering how it’s possible that a humble little shoemaking firm from rural New England could have that much money to lose. Let’s just say the alleged crimes go back to 2011, when Alden was selling an awful lot of Indy boots to workwear-clad hipsters.
Alden’s president was contacted for this post, but said he is unable to comment on pending litigation. — CC
Doesn’t surprise me. Alden sells a lot of bit loafers. Only porn magazine publishers, pimps, and strip club owners wear bit loafers.
It shows just how profitable Alden must be that their CFO could embezzle $27M over so many years w/o notice – or the lack of controls and proper oversight.
This is why highly successful privately held businesses have accounting firms on retainer that audit financial statements on at least an annual basis. But that costs money that Tarlow didn’t want to spend. Trust but verify. Years of retained earnings have evaporated. Many years of future earnings will now be used to pay down the credit facility that was maxed out.
Here are a couple videos featuring Tarlow:
If anything happens to Alden, it will hurt far worse than Brooks Brothers or any other factory closings. Much of the recent bad news could be expected, to an extent. I hope Alden is in good shape and can remain one of the best in the world of men’s fashion. Perhaps I should have bought out the lot of Alden for Brooks Brothers in my size when I had the chance…
Robert- Shoe Mart has an extensive Alden collection. Go there and stock up.
I got a pair of LHSs for about $500 last sale, and sort of regret that I didn’t get two.
Shoe Mart is a great source, and they get a “Bootmaker” edition that’s not generally available. There’s also an off-and-on Alden seconds program, I think, that you can sign up for.
He gave 15 MILLION$$$ to a charming hooker??? I’m trying to IMAGINE what a $15,000,000 hooker looks like. If he had settled for a $2,000 a night hooker (as ugly as $2,000/night hookers are), he wouldn’t now be on his way to a jail cell for years.
During a lifetime in the corporate world, I once, with a few others,
had to take a course that was supposed to help us recognize thieves among fellow employees outside of the routine audits. Sometimes it helped and sometimes it did not. The thief is nearly always one who is trusted 100%; ergo you need to think like a thief to catch a thief. Some can do that and some cannot.
Another example of American business.
!. “Nothing’s wrong unless you’re caught.” (?)
2. “It’s OK to lie, as long as you know the truth…” (Billionaire Boys Club, Joe Hunt)
3. “It’s not a lie if you believe it.” (Costanza, Seinfeld)
Unfortunately, the above quips, given in jest, are the backbone of business.
Happy Fathers’ Day, Dads.
To me, self-entitled employees often “smelled like” thieves. The thieves I saw caught always lived beyond their means. I understand that is how CIA and FBI first notice spies.
Someone mentioned earlier, “Trust but verify”.
CC, you erred in using the bit loafer as the illustration. Per Ivy-Style August 2, 2016;
I’d just chatted with Alden president Robert Clark a couple of weeks ago at the big menswear trade show here in New York. He didn’t mention this developing news story, but he confirmed it yesterday via email.
Apparently following a request from Gucci, Alden is discontinuing its bit loafer. “Gucci did ask us to stop using the bit ornament,” said Clark, “and since the style was not important to us, we agreed to do so.”
I used the bit loafer because it’s the most iniquitous shoe in Tradsville.
The first comment (Mitchell’s) sums up very nicely why I don’t and won’t wear bit loafers.
How did Alden’s auditors fail to spot the embezzlement over so many years? Alden should be able to claim the auditors’ professional indemnity insurance. Additionally, the firm should have a fiduciary guarantee policy to protect it against such fraud by directors and their staff. Robert and others should not fear for the future Alden unless there is more bad news to come.
From the articles I read at “Tweedland” it appears that Hajjar was given carte blanche. He sure seemed able to transfer huge sums without question from any quarter; no mention of outside auditors
@NC jack Legally, a firm of Alden’s size must have external auditors. It is incredible that Hajjar was a able to commit fraud on such a massive scale.
I know of another multi-million fraud involving several senior staff and suppliers who went to jail. The company successfully pursued a claim against its auditors, a big name accountancy firm. Its insurers also paid out so no financial loss was incurred.
The shoe in the illustration is probably the kind worn by the embezzler.