The son of the man who founded the Rite Aid drugstore chain will spend eight years in prison for his role in one of the biggest fraud cases to hit corporate America, Reuters reported.
Glass, 50, the company's former chief executive, was also sentenced yesterday to three years of supervised release after he completes his prison term, according to Thomas Marino, U.S. attorney for the Middle District of Pennsylvania.
As part of his plea deal, Grass, the fourth of six former Rite Aid executives to be sentenced, will pay $500,000 in fines and will forfeit $3 million to the government. Rite Aid is the nation's third-largest drugstore chain.
The Rite Aid accounting scandal touched off a free fall of the company's stock price and resulted in a restatement of earnings for the late 1990s by $1.6 billion, the Associated Press reported.
In April, Judge Sylvia Rambo rejected an earlier plea deal that had Grass serving eight years, saying it was too lenient. Two weeks ago he signed a revised plea deal whereby he would serve up to 10 years in prison on charges of conspiracy to commit accounting fraud and conspiracy to obstruct justice, Reuters reported.
However, prosecutors filed a motion for leniency on his behalf due to Grass' "substantial assistance" to the government against three of five other former executives, prosecuting attorney Kim Daniel told Reuters.
"This conviction and sentencing sends a simple message: No oneânot even the chairman of the board of a Fortune 500 companyâis above the law. The conviction of Martin Grass ... is an important first step in reaffirming public confidence in corporate integrity," Marino said in a statement.
Earlier this week, former Rite Aid Corp. executive Eric Sorkin became the first of six former top company officials to be sentenced in an accounting scandal at the drug store chain. Sorkin, 55, was sentenced to spend five months in jail and five months house arrest, to be followed by two years of probation. He was also ordered to pay a $5,000 fine.
Rambo sentenced former Chief Financial Officer Frank Bergonzi was sentenced to 28 months in prison on Wednesday, Reuters reported, adding he pleaded guilty last June to one count of conspiracy to commit accounting fraud by manipulating the Camp Hill, Pennsylvania-based company's earnings and financial statements.
Philip Markovitz, a former Rite Aid senior vice president for real estate, was sentenced on Wednesday to one month in prison, five months of detention and a $5,000 fine. He pleaded guilty in July to one count of conspiracy to obstruct justice, Reuters reported.