Former ATI boss gets 15 years

According to a report in The Union Leader, Manchester, NH, Mehdi Gabayzadeh, former president and
CEO of American Tissue, Inc., was sentenced to 15 years in federal penitentiary and forced to make $65 million restitution for a $300-million fraud scheme. He will also serve five years probation after his prison term.

Gabayzadeh was convicted in April 2005 in US District court in Islip, NY on eight counts of bank and securities fraud and conspiracy, said the paper.

ATI was once the fourth largest tissue maker in the US. With headquarters in Hauppauge, NY, it owned mills and converting facilities and had affiliated companies in places around the United States as well as one in Mexico. The ownership was a complex web of family shareholdings. ATI and its many corporate subsidiaries were S corporations under the US Internal Revenue Code of 1986, as amended. As a result, they were not subject to either US federal income taxes or state and local taxes in some states.

ATI entered Chapter 11 protection in 2001. Some of its properties were sold to companies such as Fraser and Cascades.

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