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The former finance chief of Terry Manufacturing used the proceeds from a business development loan to pay company bills.
Stephen Taub, CFO.com | US
August 7, 2006
The former chief financial officer for an Alabama-based apparel maker was sentenced Friday to more than three years in prison and ordered to pay back $5.4 million for his role in a fraud, according to the Associated Press.
Rudolph Terry, the former CFO of Terry Manufacturing, a family-owned business that was started by his father in 1963, pleaded guilty on April 3 to a conspiracy charge.
Terry and his brother, Roy Terry, the company's president and chief executive, contacted a Georgia businessman in 2000 for a loan so they could create a new business division to be called Terry Promotional Products, reported the AP. Instead, the brothers used about $5 million from the loan to pay bills at Terry Manufacturing — which at one time made uniforms for McDonald's and the U.S. military — instead of to develop the new division, according to the report.
Prosecutors also accused the company of misrepresenting its poor financial condition, added the AP.
Last year, Roy Terry pleaded guilty to inflating the company's assets to attract investors and loans, noted the wire service. He is scheduled to be sentenced on Sept. 7.