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Craig Trial Pushed Back

Los Angeles – The bank-fraud trial of three former Craig Consumer Electronics executives has been pushed back to October, according to the U.S. District Attorney for the central district of California.

‘We’re moving forward to trial,’ said a spokesman.

In September 2000, a federal grand jury indicted the three for allegedly defrauding four banks in a failed bid to keep the company afloat before it was liquidated in 1997.

The banks lost about $8 million in a scheme in which the executives borrowed more money against the company’s line of credit than allowed under the banks’ line-of-credit agreements.

Craig Consumer Electronics is not related to Golden Beach, Fla.-based NewTech, a distributor that purchased the Craig name when Craig Consumer Electronics was liquidated.

The indicted executives are former chairman and president Richard Berger, CFO and treasurer Donna Richardson, and international trade director Bonnie Metz.

The grand jury said Berger and Richardson intentionally inflated Craig’s accounts receivable and inventory levels, enabling the company to exceed its credit limit with the banks.

The grand jury’s 34-count indictment charged the executives with conspiracy, loan fraud, wire fraud, falsifying corporate books and records, lying to the publicly-traded company’s auditors, and making false statements in reports to the SEC.

At one point, according to the U.S Attorney’s office, one bank representative ‘became suspicious when the bank was asked to pay for an overseas shipment of audio equipment that Craig purportedly had owned. After the representative announced that he intended to visit Craig’s location in Cerritos [Calif.] that same business day to obtain copies of certain shipping documents, Craig sent all of its employees home in advance of his arrival, and the representative was unable to review the shipping documents in question. The following day, Metz and another Craig employee allegedly went to Craig’s offices and shredded these shipping documents.’