A court in Greece imposed sentences ranging from 10 to 17 years in prison on three members of the Koutsolioutsos family and two of their associates who were found guilty of falsifying the financial data of Folli Follie.
The court imposed the longest sentence on the founder of the Folli Follie Group, Dimitris Koutsolioutsos, announcing a 17-year prison sentence for the 83-year-old defendant.
George Koutsolioutsos was sentenced to 11 years in prison. A 10-year prison sentence was announced for his wife, Aikaterini Koutsolioutsou.
For the two convicted associates of the Koutsolioutsos family, the sentences are 10 years in prison for one woman and 15 years for the wanted former executive of the Asian branch of the company.
The convicted were sentenced on charges of setting up a criminal organization; engaging in forgery, with a total benefit and corresponding loss to others of more than 120,000 euros (which raises the charges to a felony); repeated acts of fraud against individuals and legal entities; repeated acts of market manipulation; and money laundering from criminal activities.
The convicted have appealed for the suspension of their sentences.
The scandal of Folli Follie in Greece
Folli Follie is a Greek-based international company that designs, manufactures and distributes luxury jewelry, watches and fashion accessories. The company was established in 1982 in Greece by Koutsolioutsos.
The first shop was in the commercial district of Athens. Folli Follie started out by manufacturing jewelry and in 1994 it launched its line of watches. In 1995 the first overseas store opened, in Japan. It was ranked amongst the top 10 brands in luxury goods in Japan with 80 points of sale.
The company’s design team consists of top Italian, Swiss and Greek designers who work together to present two collections per year: Autumn/Winter and Spring/Summer. The collection’s highlight is the “Premium K” collection, which includes limited edition jewelry and accessories.
A recent investigation concluded that the total loss to individuals and corporations from the actions of the convicts is estimated at slightly over €413 million ($482 million), but could be even higher.
They were found to have been forging bank documents in an attempt to show the company was financially robust. One bank account — which they represented as having a balance of €70 million — had only €60.
They are also accused of falsely showing inflated sales in China through phantom companies.
The falsified statements of those companies were sent to Greece, where Dimitris and George Koutsolioutsos asked for them to be consolidated with the balance sheets of the other subsidiaries, in Europe and North America, and the parent company, in Greece, deceiving investors and stock markets and manipulating the share price.