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Carter’s executive faces multiple federal charges

An executive of the William Carter Co., which abandoned Barnesville after the city had spent millions upgrading its water supply specifically for the company, faces multiple federal indictments. Carter’s once employed 1500 people here but now employs none – a blow from which the local economy has never recovered. Former Carter’s Inc. Executive Vice President Jospeh M. Elles was indicted Monday in federal court Atlanta on 32 charges, including securities fraud, wire fraud, causing the filing of false financial statements, and falsifying corporate books and records, related to alleged accounting irregularities at the Atlanta-based children’s clothing maker. The Securities and Exchange Commission in December 2010 charged Elles, of Las Vegas, with insider trading and securities fraud. Coinciding with that announcement, the SEC reached an agreement with Carter’s (NYSE CRI) ‘” in exchange for its full cooperation with its investigation, the SEC would not file fraud charges against Carter’s. The deal is part of the SEC’s push to persuade companies to cooperate with its investigations. Elles was an executive at Carter’s between 2004 and 2009. He is charged with fraudulently manipulating the amount of discounts that Carter’s granted to Kohl’s Corp., one of the largest retailers of Carter’s products. The conduct caused an understatement of Carter’s expenses and inflated the profit it reported. During this time, Elles exercised options to buy Carter’s stock and then sold the shares, collecting a profit for himself of about $4.7 million, it was alleged by the SEC. Source: Atlanta Business Chronicle.

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