Bagel Firm Officials Charged
Two former executives of a Los Angeles bagel company were charged Friday with falsifying business records and intimidating witnesses against them in a Securities and Exchange Commission investigation.
Named in the nine-count federal indictment were Allan Boren, former chairman, and Eric Cano, former president, of I&J; Bagels Inc., which operated under the banner of I & Joy Bagels, until its 17 stores were acquired by an East Coast firm in 1995.
According to the indictment, the new owner, Manhattan Bagel Co. of Eatontown, N.J., soon discovered evidence that I&J; had fabricated sales receipts to inflate its net worth.
Manhattan Bagel, a publicly traded corporation, notified the SEC, which launched an investigation.
The probe focused on I&J;’s sales to two purported customers, the Los Angeles law firm of Veatch, Carlson, Grogan & Nelson and Peerless Maintenance Co., a small office cleaning service.
In the last three quarters of 1995, according to the indictment, I&J; booked $206,000 worth of bagel sales to the law firm and maintenance outfit.
If true, employees at the 30-lawyer firm would have consumed 300 dozen bagels a week. The maintenance company’s workers would have eaten 225 dozen.
Boren had contacts at both places. His brother, Phillip Borini, served as administrator of the law firm. Borini’s brother-in-law, Timothy Tuttle, owned Peerless Maintenance.
To throw off auditors, the indictment said, Boren got his brother to write $58,700 in checks to I&J; drawn on the law firm’s account. It was not clear whether the law firm was ever reimbursed.
Tuttle, meanwhile, made a $50,000 payment to I&J; for which he was repaid through an intermediary the next day, the indictment said.
Attorneys for Boren and Cano could not be reached Friday.
Borini and Tuttle were not charged in the criminal indictment returned Friday, but they have been named, along with Boren and Cano, in a civil complaint filed by the SEC in May.
Ellyn S. Garofalo, an attorney representing the law firm, said Borini still is employed there. Borini and Tuttle were Boren’s victims, she said.
As the investigation gathered steam, the indictment said, Boren and Cano “threatened, intimidated and pressured” Borini, Tuttle and two others who were subpoenaed to testify before the SEC.
The indictment said Boren made death threats against his brother. It described Cano as a longtime friend of Boren’s who served as his “enforcer.”
The U.S. attorney’s office filed papers Friday asking that Boren be held without bail as a flight risk and danger to the community.
Prosecutors said he has no permanent address and moves from hotel to hotel in gambling locales throughout the country, including Las Vegas and New Orleans.
Boren is being held pending a bail hearing Tuesday. Cano is scheduled to appear in court Monday.
