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Stiff Sentences for C-level Criminals

For example: Former Leslie Fay CFO sentenced to nine years in jail. Also: What was behind Solectron's decision to split its CFO role in two? And some plain speaking at Conseco.

12Apr

Paul Polishan finally got his numbers…

The former Leslie Fay Cos. CFO was sentenced in January to a nine-year prison term with three subsequent years of probation by the U.S. District Court for the Middle District of Pennsylvania… Polishan was convicted in July of manipulating the company's earnings between 1989 and 1993… "This is certainly one of the longest sentences we've seen in the district regarding white-collar crime," says assistant U.S. attorney Bruce Brandler, the lead prosecutor in the case against Polishan…

Such lengthy sentences, adds Brandler, "are not going to be unusual in the future, because of a recent [November 2001] change in sentencing guidelines." Even before the change, crime wasn't paying too well: in April 2000, former Bennett Funding Group CFO Patrick Bennett received a 30-year jail sentence on charges that he bilked investors out of $700 million… Another finance staffer doing time is former Leslie Fay controller Donald Kenia, who is spending 2 years in a federal prison after pleading guilty and cooperating with authorities to convict Polishan…

In this case, the judge considered directly related losses at $10 million to $20 million, despite the U.S. attorney's tally of $460 million… The judge threw out Polishan's request for a sentence reduction based on a "narcissistic-personality disorder," however, after three days of testimony from psychiatric experts… Polishan, who maintains his innocence and is appealing the case, may not be donning the stripes anytime soon… His appeal is expected to take at least a year, and his lawyers are battling to maintain his freedom during the process…

The World of Susan Wang

In 1998, Solectron Corp.'s Susan Wang said the secret of being a female Fortune 1,000 CFO was "to surround yourself with good support, including a good baby-sitter and a good assistant." Wang no longer requires either… She retired from embattled Solectron in January…

The move was called a "planned transition," and indeed Wang stepped out of the CFO role last September to become EVP of corporate development when current CFO Kirin Patel joined the firm… Patel, who came to the electronics maker from iMotors, a Web-based used-car retailer, will now also assume that role… Previously, Patel had been with Cummins Inc. for 27 years…

Tony Boase, an analyst at A.G. Edwards, says that "Susan Wang was a very good CFO. She took Solectron from a small company to a multi-billion-dollar firm." Contract-manufacturer Solectron had gotten so large, says Boase, that it made sense to split the CFO position in two… With Patel now handling both roles, some could argue that Wang was pushed out, but Boase thinks the reshuffling followed careful deliberation rather than a reaction to sinking company fortunes…

In her 18 years at Solectron, Wang oversaw the company's initial public offering and its spectacular rise to become a $2.7 billion manufacturing giant… The company has recently stumbled: its stock price is off its 52-week high by 75 percent, and its recent-quarter revenue declined almost 50 percent from the year earlier...

Straight-Talking Guy

Finally, a CEO who tells it like it is… When CFO Chuck Chokel left Carmel, Ind.-based financial-services firm Conseco Inc. in March to "pursue other interests," CEO Gary Wendt wished him well… When the stock tanked after the announcement, Wendt clarified his sentiments… "Chuck did not resign," he said. "His employment was terminated...because I did not believe that he was up to the job." Company president Bill Shea will serve as acting CFO until a replacement is found…

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