Craig Electronics

From: Wayne M. Smith <wmsmith_at_earthlink.net>
Date: Sat Jan 4 15:42:00 2003

More information from a Stanford U. obituary:

T. Robert Craig Jr., '45, of Brentwood, Calif., March 6, [2002] at 79. An
economics major, he was a member of Zeta Psi. During World War II, he served as
an Army Air Force pilot. He joined Craig Corp., founded by his father to
distribute photographic materials, and transformed the company into a well-known
importer and marketer of consumer electronics. As chair and chief executive from
1952 to 1985, he was a pioneer in marketing the hand-held calculator and
developing the eight-track auto stereo system. Survivors: his wife, Katharine;
two daughters, Nancy, '69, and Carol Gordean; and his son, James.

-W

----- Original Message -----
From: "Wayne M. Smith" <wmsmith_at_earthlink.net>
To: <cctalk_at_classiccmp.org>
Sent: Saturday, January 04, 2003 12:11 PM
Subject: Re: Craig Electronics


> Here's a little hard information.
>
> Craig Electronics was a division of Craig Corp. On 12/31/85 the Los Angeles
> Times announced that Bercor, a La Mirada-based distributor of consumer
products,
> bought the operating assets of Craig Electronics for an undisclosed sum.
> Bercor, run by a guy named Richard Berger, then changed its name to Craig
> Electronics.
>
> Craig filed for bankruptcy on August 1, 1997 after restating earnings for
1996.
> Just prior to the bankruptcy the company had shifted its business, dropping
> video products in favor of CD players and boomboxes, and entering into product
> reconditioning deals in China. Shortly after the bankruptcy, the SEC
> investigated the company and the four top executives, including Berger, were
> fired. Berger eventually agreed to pay a $25,000 fine to the SEC and be
barred
> from serving as a corporate officer for five years.
>
> Following the bankruptcy filing, Craig was unable to obtain financing and the
> bankruptcy court approved a foreclosure and inventory sale, including the sale
> of the "Craig Electronics" name. The name was purchased in January 1998 by
> Newtech, a company that sells CE products under own brand and the
> White-Westinghouse name. At the time of the sale, Newtech stated that it
> intended to keep the Craig brand at its 2 largest accounts -- Best Buy and
> Circuit City.
>
> In September 2000, Richard Berger and two other former Craig executives were
> charged with 34 counts of conspiracy and fraud after allegedly misrepresenting
> corporate revenue in an effort to secure a $40 million line of credit from a
> group of banks. The banks reportedly lost $8 million and shareholders lost
more
> than $5 million.
>
> The case is still pending with the trial scheduled for February 4, 2003 in
> federal court in Los Angeles.
>
> Here's the last news article I could find concerning an earlier trial
> continuance.
>
> -W
>
> Craig Trial Pushed Back
> By Joseph Palenchar
> TWICE
> 4/19/2002 11:46:00 AM
>
> Los Angeles - The bank-fraud trial of three former Craig Consumer Electronics
> executives has been pushed back to October, according to the U.S. District
> Attorney for the central district of California.
>
> 'We're moving forward to trial,' said a spokesman.
>
> In September 2000, a federal grand jury indicted the three for allegedly
> defrauding four banks in a failed bid to keep the company afloat before it was
> liquidated in 1997.
>
> The banks lost about $8 million in a scheme in which the executives borrowed
> more money against the company's line of credit than allowed under the banks'
> line-of-credit agreements.
>
> Craig Consumer Electronics is not related to Golden Beach, Fla.-based NewTech,
a
> distributor that purchased the Craig name when Craig Consumer Electronics was
> liquidated.
>
> The indicted executives are former chairman and president Richard Berger, CFO
> and treasurer Donna Richardson, and international trade director Bonnie Metz.
> The grand jury said Berger and Richardson intentionally inflated Craig's
> accounts receivable and inventory levels, enabling the company to exceed its
> credit limit with the banks.
>
> The grand jury's 34-count indictment charged the executives with conspiracy,
> loan fraud, wire fraud, falsifying corporate books and records, lying to the
> publicly-traded company's auditors, and making false statements in reports to
> the SEC.
>
> At one point, according to the U.S Attorney's office, one bank representative
> 'became suspicious when the bank was asked to pay for an overseas shipment of
> audio equipment that Craig purportedly had owned. After the representative
> announced that he intended to visit Craig's location in Cerritos [Calif.] that
> same business day to obtain copies of certain shipping documents, Craig sent
all
> of its employees home in advance of his arrival, and the representative was
> unable to review the shipping documents in question. The following day, Metz
and
> another Craig employee allegedly went to Craig's offices and shredded these
> shipping documents.'
>
>
Received on Sat Jan 04 2003 - 15:42:00 GMT