American Notes the Boardroom

Lots of companies are suffering from vanishing profits, but Cascade International has a far more embarrassing problem: a missing chairman. The Florida-based retailer's founder and chief executive, Victor Incendy, disappeared last week, two days before a scheduled meeting at which he had promised to reply to accusations that his clothes-and-cosmetics empire was built on phantom stores and phony figures. The episode is a bizarre end to the spectacular seven-year rise of Cascade, which had regularly reported annual sales gains of 40% or more from a chain of stores with such names as Boutiques Allison and Fran's Fashions.

Touted by the charismatic Incendy, an immigrant from Hungary, Cascade gained a reputation as one of Wall Street's hot over-the-counter stocks. But during the past year, Cascade's glowing financial self-portrait began to arouse skepticism. Although the company claimed to have 29 stores in California, a search by a financial newsletter turned up only 18. Officials are looking for Incendy, and an outside auditor is currently going over the company's books, which even Cascade concedes "may not be accurate."