Ex-Just for Feet Exec Pleads Guilty
May. 12, 2003
BIRMINGHAM, Ala. (AP) _ The federal government's investigation of Just for Feet resulted in a guilty plea Monday from a former executive who admitted inflating earnings during the late 1990s when the Alabama-based company became the nation's second largest athletic shoe retailer.
Adam Gilburne, 40, of Paradise Valley, Ariz., pleaded guilty in U.S. District Court in Birmingham to conspiracy to commit wire fraud and securities fraud.
The scheme resulted in income being overstated by $3 million in 1997 and $5.3 million in 1998, federal prosecutors alleged.
Gilburne, who is cooperating with the federal government's ongoing investigation of Just for Feet, will be sentenced later, U.S. Attorney Alice Martin said. He could receive up to five years in prison and a $250,000 fine.
Just for Feet was a publicly traded company that began with a single store in Birmingham in 1977. By 1999, it had locations in 30 states and $775 million in annual sales. But its rapid growth ended in November 1999, when it filed for bankruptcy.
In February 2000, it sold 102 stores and other assets to New Jersey-based Footstar Inc. for $72 million. The stores retained the Just for Feet name.
Investigators said Gilburne and others devised a scheme to artificially inflate Just for Feet's financial condition from December 1996 until November 1999 through improper recognition of income received from Birmingham-based Rogers Advertising, the company's sole advertising agency.
Rogers Advertising officials did not immediately return calls seeking comment Monday.