Check Manipulation Alleged : Jody Apparel Officer Faces Fraud Charge

The controller of a Los Angeles dress manufacturer was arraigned Monday on charges that he embezzled as much as $1 million by manipulating checks.

Michael Stevenson, a 37-year-old resident of Westwood who was hired seven months ago by Jody Apparel Group, was being held Tuesday in Los Angeles County Jail on suspicion of grand theft and of being a fugitive from New York and New Jersey. Bail was set at $150,000.

A New York warrant detailing similar charges of theft from another company lists a fugitive matching Stevenson’s description who used the name Alan Howard Sobel, according to Lt. Bill Hunt of the Beverly Hills Police Department.

At Jody Apparel, Stevenson “purported himself to be a CPA and got himself employed,” Hunt said. “Through working in an accounting capacity, he managed evidently to embezzle through manipulating checks for as much as $1 million.” Bank of America and City National Bank are listed as victims of the alleged embezzlement, Hunt added.

According to Hunt, Stevenson persuaded Jody Apparel to sign over tax payment checks to him or a company controlled by him. In addition, some checks were forged, Hunt alleged.

John Siegel, president of Jody Apparel, said the company was “victimized by embezzlement” and reported its concerns to the police a day before the arrest was made last Thursday. Hunt said Stevenson was arrested at City National’s Beverly Hills office, where he was trying to negotiate some of the checks.

Jody Apparel, formerly Jody Tootique, is a division of Faberge, a large, New York-based cosmetics and perfume concern. Jody makes dresses under license for Pierre Cardin and Diane Von Furstenberg, as well as under such labels as JT Dress and Jody of California. The 25-year-old company has 250 employees and annual sales of $50 million.

Jody Tootique was for several years a division of HRT Industries, which also owned the defunct Zodys discount chain, but has changed hands a couple of times, Siegel said. Faberge bought the company 1 1/2 years ago.

“We are a very healthy company,” Siegel said. “We won’t have any problem surviving (this).” He said that no layoffs are planned as a result of the problem and that the company “expects to recover a substantial amount” of the lost funds. He would not elaborate.