A federal jury on Monday convicted Mark Cocchiola and Steven Venechanos on 38 counts that included conspiracy, bank fraud, securities fraud, mail and wire fraud.
Cocchiola founded of the Paterson-based company; Venechanos was its chief financial officer and corporate secretary.
"These were corrupt businessmen," U.S. Attorney Christopher J. Christie said in a statement. "They bankrupted a company that was in reality a myth built on phony sales. They were driven by unbridled greed without a thought to the investors they charmed with their illusion of Suprema's success."
Cocchiola, 51, of Englewood Cliffs, and Venechanos, 48, of New Milford, could face dozens of years in prison and millions of dollars in fines when sentenced July 10 by U.S. District Judge Stanley R. Chesler. The heaviest penalties are for the 17 bank fraud charges, each of which carries up to 30 years in prison and a $1 million fine.
Cocchiola and Venechanos were indicted in July 2005. They were convicted following an eight-week trial in which the jury deliberated eight days.
The former controller of Suprema, along with a former manager and four former customers, pleaded guilty to charges including securities fraud and food adulteration charges.
Suprema was liquidated after filing for bankruptcy protection in March 2002.
Prosecutors said that Suprema used the illusion of its growth to conduct a series of secondary stock offerings, netting Suprema millions from investors. Meanwhile, Cocchiola got over $2.5 million, and Venechanos over $1 million, from selling their holdings.
Prosecutors also said that in the second half of 2001, nearly 20 percent of Suprema's reported inventory was imitation cheese that had been relabeled as higher-priced real cheese.
