Suprema CFO gets 8 years
By GREG SAITZ
STAR-LEDGER STAFF
Steve Venechanos didn't lead an ostentatious lifestyle. He didn't live in a big house or drive a fancy car. He spent time with his kids and helped his neighbors. He was, in his own words, "an ordinary guy."
But Venechanos also was chief financial officer of Suprema Specialties, a cheese company infested with fraud that cost investors and lenders at least $115 million. And for his part in that deception, he will spend the next eight years in federal prison.
As four rows of the 49-year-old New Milford man's family and friends looked on in a Newark courtroom yesterday, U.S. District Judge Stanley Chesler imposed the sentence that also included $115 million in restitution.
"While you weren't the ringleader, you never had the courage to do what you had to do — blow the whistle. You went along," the judge said. "You did go along and your act of complicity in this fraud caused untold damage."
The punishment is a bit more than half the 15-year prison term Suprema Chief Executive Mark Cocchiola received almost two weeks ago. A federal jury in Newark convicted both men of dozens of charges after a seven-week trial last April.
Prosecutors contended the fabulous sales and profit Paterson-based Suprema posted in the years before it filed for bankruptcy protection in February 2002 were illusory. The numbers were based on a complex fraud that falsely inflated sales by $560 million during a seven-year period and a separate scheme to inflate the value of inventory, the government said.
Venechanos signed documents certifying the accuracy of Suprema's financial information to both banks and securities regulators at a time when he knew about the scheme being run by others, prosecutors said.
"Nobody feels worse than I do about what happened at Suprema," Venechanos said during the hearing. "I agonize every day about the shareholders and banks that lost money."
Moments earlier Venechanos wiped tears from his eyes as his attorney, John Whipple, talked about the ordinariness of Venechanos' life and the devastating effect a long prison term would have on his wife and two daughters, 16 and 11.
"They don't have a big life," Whipple said.
But Assistant U.S. Attorney John Fietkiewicz noted Venechanos received about $1 million from selling Suprema stock.
The judge, who received more than 75 letters in support of Venechanos, acknowledged Venechanos seemed to be an ordinary guy living an ordinary life. But Chesler said there was no real doubt about Venechanos' guilt.
He also had to consider a sentence that factored in deterrence to others who may find themselves in a similar situation.
"In corporate America today, there are thousands of people who are in the same position you were in," the judge said. "This has to stop, and it stops with people like you."
Venechanos is appealing his conviction. Six other Suprema employees and customers who pleaded guilty to participating in the fraud still are awaiting sentence.
The judge allowed Venechanos to surrender to the Bureau of Prisons and begin his sentence July 1, after his daughters finish their school year.