Rite Aid Fraud
In Washington D.C. (June 21, 2002) The Securities and Exchange Commission filed accounting fraud known as the Rite Aid Fraud arraigns against three ex-executives of a legendary organization of US, Rite Aid Corp.
The U. S. public prosecutor for Pennsylvania's middle district also proclaimed other associated criminal charges.
The SEC's complaint charges former Chief executive of Rite Aid Corp., Martin Grass and former CFO Frank Bergonzi together with former VC of Rite Aid Corp. Franklin Brown for conducting and planning an extensive accounting Rite Aid fraud scandal.
The grievance declares that Rite Aid Corp. exaggerated its revenue in each quarter from May 1997 to May 1999, by colossal amounts. The complaint also accuses that Martin Grass caused Rite Aid Corp. to fail to divulge numerous transactions, in which he sought to develop himself at the expenses of Rite Aid Corp's investors.
This complaint also alleges that these culprits violated the Consumer Fraud Act (CFA) along with the Weights and Measures Act because of indecent price scanning at around 76 stores.
These former executives of Rite Aid Corp. were sentenced for their roles in a $1.7 billion accounting Rite Aid fraud that destabilized the no. 3 U.S. drugstore chain around 4 years ago. Former CEO of Rite Aid Corp. Frank Bergonzi was sentenced to 28 months in jail by U.S. district judge.
On the other hand for providing "significant assistance" to US prosecutors helped Bergonzi lessen his sentence. And he also agreed to be barred forever from serving as an executive officer or director or chairman of any public traded corporation. While the second culprit, a former SVP of Rite Aid Corp.
Philip Markovitz, received a sentence of one month in jail and five months of home internment together with a fine of $5,000. According to the state of New Jersey these defenders were involved in selling the expired merchandise at drug stores, selling of non-prescribed drugs, tot formulas, baby foods along with charging very high consumer prices.
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