Former Rite Aid Counsel First to be Convicted After Scandals

Franklin C. Brown, former Rite Aid chief counsel, was convicted Friday after a jury found him guilty of conspiracy and other charges, the first jury verdict in the wake of corporate scandals.

Brown was convicted of conspiracy to inflate earnings, several obstruction charges, witness tampering and five charges of lying to SEC investigators, in a case that came to light a year before Enron erupted. He was acquitted of wire fraud and is free until sentencing at a date to be named later.

"We're all satisfied. This jury did what one hopes juries will do. They looked at the evidence and they fairly and truly tried the case," Assistant U.S. Attorney Martin Carlson said and the Associated Press reported.

The AP reported that prosecutors accused Brown, 75, of conspiring to inflate income at the drugstore chain in the late 1990s; helping to backdate severance letters so he and other senior executives could collect big payouts; and trying to mislead internal and federal investigators. The witness tampering count carries a 10-year maximum prison sentence with all of the other charges having maximum sentences of five years.

Brown’s defense team countered by calling their client “zealous,” and said he had not broken any laws. One attorney even claimed that some of the drugstore chain’s former executives had lied in their testimony against Brown.

"These would have been normal business transactions in a different environment," defense attorney Reid Weingarten said, vowing to appeal.

According to the AP, Brown appeared to close his eyes as the verdicts were read. He didn’t talk to reporters afterward.

"It seemed like these people were trying to run a business and they did something wrong," jury forewoman Jessica Warren, 22, told the AP. "Now they're being punished for it."

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