Chicago Business Litigation Lawyer Blog
Last fall, Alden Shoe Co. realized its CFO had allegedly been embezzling millions of corporate funds and transferring them to his own, personal accounts. More than half of what he allegedly stole from the shoe company he is claimed to have used to pay for gifts he gave to Bianca de la Garza, including a car, diamond jewelry, designer clothes and handbags, and investing in her production company, Lucky Gal Productions.
Unfortunately, Lucky Gal Productions according to news reports has never turned a profit in the six years since it was founded, making it unlikely the former CFO will ever see a return on his investment.
Richard Hajjar was hired by the shoe company back in 1987. His two brothers already worked for the company and his father had been the CPA for Arthur S. Tarlow Jr., Alden’s current president. No one questioned Hajjar’s loyalty until last fall when Tarlow realized Hajjar had allegedly been moving funds from the company’s bank account into family trusts. When he approached Hajjar about it, Hajjar allegedly dodged the question but assured Tarlow the funds would be transferred back into the company’s bank account.
Hajjar then according to news reports stopped showing up for working, texting Tarlow to say he wasn’t feeling well. When the funds didn’t show up in the bank account, Hajjar allegedly stopped responding to Tarlow’s text messages, and Tarlow went to his Santander bank branch, where the shoe company had accounts. Tarlow then discovered that $10 million in retained earnings was allegedly missing from the account.
Not long after that, Tarlow learned that Hajjar had allegedly opened a line of credit worth $8 million, and completely drawn it down supposedly without Tarlow’s knowledge, much less his approval.
When all of Hajjar’s claimed embezzlement was tallied, his employer allegedly found he had stolen approximately $27 million from the company between 2011 and 2019, including $3.7 million he had taken by writing out checks to himself.
Hajjar also allegedly transferred tens of millions of dollars from the company’s active bank accounts into a trust that was owned by the company, but which was dormant. Hajjar then named himself the trustee of the account and used it to embezzle at least $24 million by using the funds to write checks to himself and pay off his personal expenses.
At least $15 million of the funds stolen from that trust allegedly went to Bianca de la Garza, a fashion influencer and former anchor at WCVB-TV before she left in 2014 to start her own media company, Lucky Gal Productions. In an interview with Forbes in 2018, de la Garza said she had raised all the money for the company herself, but neglected to mention that millions of dollars in funding had come from Hajjar, with whom she had been friends since about 2012. The two vacationed together and Hajjar bought her lavish gifts and invested millions in her company. Unfortunately for Hajjar, the terms of their agreement gave Lucky Gal Productions the power to decide when, or even if, he would get a return on his investment.
Hajjar might never see that money again, but Alden Shoe Co. has sued Hajjar for the money he stole, demanding he pays it all back. De la Garza, Lucky Gal Productions, and BDG were all named as defendants in the lawsuit. The Defendants are contesting the claims.
According to the court filings, De la Garza’s attorney has assured Alden that De la Garza will return all the allegedly misappropriated funds she received, although new reports state she has yet to return any of the money.
Hajjar reportedly has also agreed to cooperate. He has begun to pay back what he allegedly stole, but according to news reports so far he has returned less than $3 million of the $27 million he allegedly missapporiated.
At Lubin Austermuehle, we’re all business when it comes to offering the highest level of quality service to businesses engaged in complex disputes, whether it’s shareholder oppression, breach of contract, defamation and far more. We’re also class action attorneys who have earned a reputation for victories, including what Crain’s Chicago Business called “the largest class action settlement in Illinois.” From Skokie to the Waukegan, we are here for you. Call and take advantage of our FREE consultation where we can discuss your specific needs and wishes and our ability to meet them. Contact us here or call us on our locally number at 630-333-0333.