Ex-Department Store CEO Indicted

Macy's, Bloomies Tried to Block Bed, Bath & Beyond's Entry into Tableware

January 4, 2005
A New York grand jury has indicted the former chairman and CEO of Federated Department Stores for perjury, New York Attorney General Eliot Spitzer said.

Tablegate • Federated's Ex-CEO Indicted • Department Stores Tried to Restrict Competition in Tableware

The indictment charges James Zimmerman with lying under oath to conceal evidence of possible antitrust violations.

The charge stems from an investigation that began in 2003 of whether two leading department store chains and two prominent manufacturers of tableware had conspired to limit distribution of products sold to consumers.

The upscale department store chains were accused of engineering a scheme to keep another national retailer – Bed, Bath & Beyond – from expanding into their lucrative tableware market. The companies involved – Federated, May Department Stores, Lenox, Inc., and Waterford Wedgwood, U.S.A.– settled that case in August 2004 and paid $2.9 million in civil penalties.

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Zimmerman was arraigned before Justice James Yates of the New York County Supreme Court, and charged with Perjury in the First Degree, a class D felony. The maximum sentence for a conviction of this crime is 2 1/3 - 7 years in state prison.

According to the indictment, Zimmerman intentionally offered false testimony in a sworn statement on April 9, 2004. Specifically, Zimmerman was asked whether he had called Sir Anthony O'Reilly, the Chairman of the Board of Waterford, Wedgewood, PLC, to dissuade him from selling Waterford products through Bed Bath & Beyond or to otherwise encourage him to pull out of the negotiations to do so.

Zimmerman repeatedly told the assistant attorney general taking the deposition that he had never discussed Bed Bath & Beyond in any way with anyone at Waterford, including O'Reilly. According to the indictment, Zimmerman knew that these denials were untrue.

Zimmerman retired in 2004 as the top executive of Federated, which operates 450 department stores nationwide, including the flagship Macy's and Bloomingdale's stores in New York City.

The case is being prosecuted by Assistant Attorney General Kristen Marcelle under the direction of Deputy Chief Kevin Suttlehan and Bureau Chief Janet Cohn of the Criminal Prosecutions Bureau. The case was investigated by Investigator Karon Richardson under the supervision of Deputy Chief Investigator Hank Lemons.

The charges are merely accusations and the defendant is presumed innocent until and unless proven guilty.

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