Rite Aid Scandal Earns Ex-Officer 10 Years in Jail

Rejecting arguments that a former Rite Aid Corp. officer should be spared jail time, a federal judge sentenced 76-year-old Franklin Brown to 10 years in prison, Reuters reported.


Click Here

Brown was convicted earlier this month of making false statements to the Securities and Exchange Commission, obstructing justice, witness tampering and other charges.

Inflated profits and lavish executive compensation packages left the drug store chain burdened by debt and forced to restate $1.6 billion in earnings in 2000. While the business is bouncing back, the $23 million fraud nearly led to bankruptcy.

Attorney Ellen Brotman argued that Brown should be detained at home because of his age, his heart condition and the risk that he would be abused in prison by much younger inmates.

"Imprisonment of any significant length is going to be a de facto life sentence for Mr. Brown," Brotman told the court. Brown's attorneys plan to appeal the conviction and the sentence, which they pointed out was longer than the eight years received by former Rite Aid Chief Executive Martin Graff. In fact, Brown's sentence is the longest of all six former executives charged in the scandal.

In a statement to the judge, Brown referred to his conviction as "the most painful and humbling experience of my life."

"It is absolutely awful to think that I failed in my responsibility because some innocent people have been hurt. I'm deeply sorry," he said.

You may like these other stories...

By Teresa Ambord, Correspondent You'd think a man who masterminded the biggest Ponzi scheme in history would have ice water in his veins. The name Bernard Madoff has become synonymous with investment scams after his...
By Ken Berry In a new case decided by the US Supreme Court, the remnants of a tax shelter partially constructed by wily Texas billionaire Billy Joe McCombs - known informally as "Red" - collapsed like a house...
By Teresa Ambord, Correspondent The IRS has suffered numerous hits lately, though they'd be hard pressed to find much sympathy from the public. Recent months have seen fumble after fumble in the news, and here's...

Upcoming CPE Webinars

Apr 17
In this exciting presentation Excel expert David H. Ringstrom, CPA shares tricks that you can use with pivot tables every day. Remember, either you work Excel, or it works you!
Apr 22
Is everyone at your organization meeting your client service expectations? Let client service expert, Kristen Rampe, CPA help you establish a reputation of top-tier service in every facet of your firm during this one hour webinar.
Apr 24
In this session Excel expert David Ringstrom, CPA introduces you to a powerful but underutilized macro feature in Excel.
Apr 25
This material focuses on the principles of accounting for non-profit organizations' revenues. It will include discussions of revenue recognition for cash and non-cash contributions as well as other revenues commonly received by non-profit organizations.