SEATTLE — A former chief financial officer at Cutter &Buck has been sentenced to three months in prison and three months of home confinement for covering up a multimillion-dollar accounting fraud.
Stephen Scott Lowber, 53, of Mill Creek, said in court Friday, Aug. 27, that his inability to blow the whistle damaged his career, his standing in his church and his family name.
“I profoundly regret the failures I had at Cutter &Buck. I know people were hurt, the investing public was hurt,” Lowber said. “These decisions I made really fly in the face of what I have stood for for 53 years.”
U.S. District Judge Thomas Zilly also sentenced Lowber to 200 hours of community service.
He acknowledged Lowber’s professional accomplishments but said the amount of the losses meant that prison time was needed.
“Investors, public investors who relied upon you as a CFO of a public company, lost a lot of money,” Zilly said.
Jeff Coopersmith, assistant U.S. attorney, said he was satisfied with the penalty even though it was less than his recommendation. He had asked for five months of prison and five months of home detention.
Cutter &Buck, a Seattle-based golf apparel company, shipped goods worth $5.7 million to three distributors in April 2000.
The company added $5.7 million to revenue even though the merchandise wasn’t sold and was essentially being “warehoused” by the distributors.
Lowber resigned from Cutter &Buck in August 2002. One year later he pleaded guilty to being an accessory after the fact to wire fraud.
In a plea agreement, he admitted that when he learned of the scheme in fall 2000, he took steps to hide the information from the board and outside auditors.
This resulted in false information being released through filings with the federal Securities and Exchange Commission, federal prosecutors said.
Lowber also paid $50,000 in penalties related to civil charges from the Securities and Exchange Commission. An order bars him from serving as an officer or director of a public company.
On Tuesday, Aug. 24, former Comptroller Athena Diaz, 28, of Sammamish, pleaded guilty to knowingly circumventing internal accounting records, a felony.
She acknowledged helping in the revenue scheme at Cutter &Buck.
This story first appeared in The Herald in Everett.
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