Dive Brief:
- Last month, Richard Hajjar, the former CFO of family-owned Middleborough, Mass.-based Alden Shoe Co., was sentenced to nearly six years in prison, followed by three years of supervised release, after pleading guilty to wire fraud, unlawful monetary transactions and filing a false tax return.
- On Monday, local outlet MassLive reported that Hajjar’s home in Duxbury, Mass., will be seized by the federal government, citing court records.
- Hajjar’s charges stemmed from an investigation which found him guilty of embezzling roughly $30 million from his longtime employer from 2011 until his firing in 2019. His home is valued at just over $800,000.
Dive Insight:
The company, owned by the Tarlow family, hired Hajjar in 1987, and over time he became a “trusted advisor,” Boston Magazine wrote in a lengthy report last year. “The Tarlow and Hajjar families — who vacationed and socialized together — weren’t entwined just professionally, but personally, too.”
In October 2019, company owner Arthur Tarlow Jr. asked Hajjar to transfer “millions of dollars” in the company’s cash reserves into family trusts. In response, Hajjar failed to do so, and quickly stopped responding, Boston Magazine said.
This led Tarlow to dig into the company accounts, where he found that Hajjar had withdrawn “millions and millions” of dollars. He fired him on the spot.
Tarlow’s forensic accountants were able to find that, beginning in 2011, Hajjar routinely wrote checks to himself and deposited them in his personal accounts. He also transferred money from the company’s cash reserve to a defunct Alden trust account, and then over to his personal accounts, Boston Magazine reported.
As part of Hajjar’s sentencing, he was ordered to pay a restitution of just under $34 million, as well as a forfeiture of just over $27 million.
He used the money to “enrich himself” and buy gifts and luxury travel for those close to him, including private flights to the Caribbean and diamond jewelry, the district attorney said.
“Hajjar abused and exploited the trust Alden placed in him to fatten his own piggy bank and to support his shockingly opulent lifestyle, exemplified by the ultimate status symbol – a Nantucket beach house,” the U.S. Attorney’s Office wrote in its sentencing recommendation, Boston Magazine reported last month. “Put simply, his crime was fueled by greed.”
Between 2014 and 2019, Hajjar also failed to report the proceeds of his embezzlement scheme as income on his tax returns, which amounted to him owing more than $5 million in taxes to the IRS.
