LI businessmen indicted in Aéropostale fraud

Two Long Island men have been indicted after an FBI investigation found they colluded in a $350-million contract kickback scheme involving Aéropostale clothing, federal prosecutor Robert Nardoza said.

The victims in the case were Aéropostale Inc. and its stockholders, the prosecutors said.

Christopher Finazzo, 54, of Garden City, and Douglas Dey, 53, of Southold, are charged with mail and wire fraud, money laundering conspiracy, and conspiracy to violate the travel act. Dey and Finazzo could not be reached for comment Monday.

Finazzo is the former chief merchandising officer of Aéropostale Inc. Dey is the owner of South Bay Apparel Inc., of Calverton, which supplied clothing to Aéropostale.

In their scheme, Finazzo caused Aéropostale to buy more than $350 million in merchandise from South Bay, prosecutors said. In exchange, Finazzo got about half of South Bay's profits, prosecutors said.

Finazzo's share was at least $14 million, prosecutors said.

Dey allegedly paid Finazzo more than $14 million through C&D Retail Consultants Inc., a company controlled by Finazzo, and also invested in joint ventures with him. Aéropostale and its employees were unaware of the scheme, prosecutors said.

"Finazzo and Dey allegedly entered into a sweetheart deal that was essentially a kickback scheme -- Finazzo funneled a third of a billion dollars in purchases to Dey's company and personally got millions in return," said George Venizelos, chief of the FBI in New York.