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Sarbanes-Oxley News & Developments
Rite Aid Jurors Begin Deliberations for Fate of BrownThe fate of 75 year old former vice chairman and chief counsel to be determined.
> > Franklin Brown faces multiple felony counts including fraud and obstruction of justice for what prosecutors say was his central role in a massive conspiracy by senior officers to inflate Rite Aid profits and reap rich rewards through executive compensation schemes.
Five other executives, including former CEO Martin Grass, have already plead guilty to wrongdoing, and all but Grass testified against Brown during the trial that began Sept. 29th. Brown was named as a co-defendent in a 36 count federal grand jury indictment that charges him with helping Grass and former CFO Frank Bergonzi in a series of fradulent schemes to doctor books. Authorities also say he knowingly distributed bogus severance letters to co-conspirators and urged witnesses to lie to the FBI and grand jury.
Prosecutors say Brown aided a company accounting scheme to book $75.6 million in incomplete rebate agreements from pharmaceutical vendors as income, helped hide the personal role of Martin Grass in a $2.6 million real estate deal and distributed eight back-dated severance letters worth $16 million.
Grass, Bergonzi, former Vice President Eric Sorkin and former Senior Vice President Philip Markovitz pleaded guilty earlier this year to conspiracy. Each face the prospect of prison. Former Rite Aid President, Timothy Noonan, pleaded guilty last summer to a charge of failing to report a felony. He is expected to be sentenced to probation after cooperating with investigators and serving as a prime prosecution witness at the trial of Brown.
Source: CNN Money
Published:2003-10-15
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