NEW YORK (Reuters) - An internal investigation at American Apparel Inc has found that its CEO Dov Charney violated company policies, ranging from misusing company funds to failing to stop the discrediting of at least one former employee who had accused him of sexual harassment, a person close to the matter said.
The probe revealed that Charney, who founded the hipster clothing brand, was using company funds to book flights for his parents, the person said. He also sometimes provided corporate apartments to friends and stayed in them himself when he wasn’t on company business, according to this person.
The investigation’s findings also included that Charney had known about but failed to stop a blog created by an American Apparel employee that displayed naked photographs of former saleswoman, Irene Morales, who had sued him, the person said.
This person said that Charney believed any use of apartments was not material and was normal business practice. In terms of the travel charges, this person said Charney’s father is on American Apparel’s payroll and that his mother, although not an employee, is a retail and design contributor to the company.
Charney’s employment contract entitled him to “vacation benefits and reimbursement of reasonable and necessary business expenses,” according to a company filing in April. His father, Morris Charney, received $238,000 in architectural consulting and director fees from the company in 2013, the filing showed.
http://www.newsweek.com/investigation-finds-dov-charney-misused-american-apparel-funds-255836
I wonder if there are come criminal charges in Dov’s future.
The board wants him gone. Behavior that blatant doesn’t happen overnight, so it’s coming to light now for a reason. Using corporate flats for nonbusiness purposes when available is not unusual or wrong, it’s a typical a perk for upper echelon and even younger up and coming talent. One of my former employers had and may still have a very nice flat near the UN in NYC. It was available if not already booked to any employee that traveled on the company dime. They had two King Airs and a Lear that you could hop if a seat was open, too. Not sure why people were so wild about those Lears. Loud and not very spacious, the King Air was more comfortable. Speed was the only upside. Prestige of arriving in one too, I guess.