Originally created 04/24/04

CEO of Atlanta Bread Co. accused in South African fraud scheme

ATLANTA -- The chief executive of one of the nation's largest cafe and bakery chains is accused in a scheme to defraud investors in South Africa, and control of the company has been temporarily shifted to his brother as he fights the charges.

Jerry Couvaras, head of the 167-restaurant Atlanta Bread Company, has surrendered his passport and will remain in Johannesburg until the case is resolved, spokeswoman Jane Langley said Friday.

He was arrested there last month, but the privately held company did not issue a statement and word of what happened only recently surfaced. In his absence, Couvaras' younger brother, Basil, has been appointed to run the company, though Jerry Couvaras is still president and CEO, the company said.

"Jerry's absence is not making it difficult," chief financial officer Alan Sack said in an interview. "This is not a simple business and there are very strong leaders and managers in place."

Company spokeswoman Alice Coggin said "it's business as usual here for us." As for Couvaras' fate, Sack said, "I'm distressed and really wish him well through this."

South African police confirmed Jerry Couvaras' arrest, but offered only sketchy details about the case.

Johannesburg police spokesman Sgt. Sanku Tsunke said Couvaras was arrested by Interpol on March 21 at Johannesburg International Airport as he was trying to return to the United States.

He was charged with fraud after some 2,000 South Africans lost $6.5 million in an investment scheme that collapsed either in 1992 or 1993.

Tsunke did not have details of the alleged scheme, or why it took so long to come to light. Atlanta Bread Company officials said the charges are unrelated to the company.

Couvaras made a brief court appearance on April 1 and was released on $148,000 bail. Under the terms of his release, he is required to turn in his passport and report to Johannesburg police twice a day. He is due back in court June 2.

Langley said she believes the charges stem from a decade-old lawsuit that had been settled. She said Couvaras was surprised when he was picked up by authorities in Johannesburg, where he and his family were on vacation. His wife and four children have since returned to Atlanta.

"He strongly disagrees with these allegations and he's going to contest it," Langley said.

Couvaras' lawyer in Johannesburg, Brian Lebos, could not be reached for comment.

The Atlanta Bread Company was founded in Atlanta in 1993 with one restaurant. It quickly grew into a chain with more than 160 restaurants in 24 states with systemwide-revenue last year of $215 million. The company has 5,000 employees, though many of the restaurants are franchise-owned.

Couvaras joined the company in 1994 as manager of a Marietta location. He was appointed president and CEO in 1995.

Associated Press Alexandra Zavis contributed to this report from Johannesburg, South Africa.

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