Former Alden Shoe CFO Pleading Guilty to $30M Embezzlement Scheme

April 14, 2021

The other shoe has dropped for former Alden Shoe Co. chief financial officer Richard Hajjar, who agreed to plead guilty to a host of charges tied to a $30 million embezzlement scheme at the company.

According to the Massachusetts U.S. Attorney’s Office, Hajjar, 64, wrote checks to himself and transferred money from the company to personal accounts beginning in at least 2011 and through 2019, when he was fired.

“Hajjar embezzled approximately $30 million which he used to enrich himself and to buy gifts and luxury travel for others close to him, including private flights to the Caribbean and diamond jewelry,” according to a statement from the office of acting U.S. attorney Nathaniel Mendell.

And then — proving that crime might not pay, but that criminals still need to pay their taxes — the Feds noted that “Hajjar failed to report the proceeds of his embezzlement as income on his tax returns, thereby failing to pay approximately $5,112,822 in taxes to the Internal Revenue Service.”

The former CFO agreed to plead guilty to wire fraud, unlawful monetary transactions and filing a false tax return. The wire fraud charge carries a sentence of up to 20 years in prison, while the unlawful monetary transaction could cost 10 years and filing a false tax return could bring up to three years.

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Alden sketched out the events that led to the charges in a related lawsuit last summer.

The Middleborough, Mass.-based shoe company hired Hajjar in 1987 and saw him become a key employee overseeing most day-to-day financial matters and becoming a trusted adviser to the Tarlow family (president Arthur Tarlow Jr. owns the company, as did his father and grandfather before him).

Beginning in 2009, Tarlow chose to leave retained earnings in the company in case more was needed for operations. The rainy day fund swelled to well over $10 million by 2019, when Tarlow began some estate planning and asked Hajjar to prepare to distribute the earnings out of Alden to be placed in family trusts.

According to the suit, Hajjar then stopped showing up to work, said he was not feeling well and, once the wire transfer never went through, stopped replying to text messages.

Tarlow visited the local branch of his bank and found nearly half of the company’s retained earnings were missing and later discovered an $8 million line of credit in Alden’s name that had been drawn down completely.