Ex-Rite Aid Execs Indicted for Accounting Fraud
HARRISBURG, Pa. - Three former Rite Aid executives and a current employee of the copmany have been indicted by a federal grand jury, accused of charges related to a previously reported securities fraud scandal, The Associated Press reports.
Facing the most serious charges, including conspiracy to defraud and making false statements to the SEC, are Martin L. Grass, 47, former chairman and CEO; Franklin Brown, 74, former chief counsel and vice chairman; and Franklyn Bergonzi, 57, former executive vice president and chief financial officer.
Prosecutors say their actions forced Rite Aid to reduce its stated earnings by $1.6 billion -- the largest restatement of corporate earnings in U.S. history.
Grass and Brown have both denied any wrongdoing, and Bergonzi did not return calls from the AP seeking comment.
A fourth person named in the indictment, Eric Sorkin, 53, executive vice president for pharmacy services, was charged with conspiracy to obstruct justice and making false statements. A Rite Aid spokeswoman said Sorkin was suspended Friday. Sorkin hung up when reached by phone at home.
All four are scheduled to appear in federal court July 16.
Rite Aid, with 3,600 stores in 30 states and Washington, D.C., announced Friday that the SEC investigation into its financial reporting and accounting had ended without any fines against the company. It said it cooperated fully and admitted to no wrongdoing.
Facing the most serious charges, including conspiracy to defraud and making false statements to the SEC, are Martin L. Grass, 47, former chairman and CEO; Franklin Brown, 74, former chief counsel and vice chairman; and Franklyn Bergonzi, 57, former executive vice president and chief financial officer.
Prosecutors say their actions forced Rite Aid to reduce its stated earnings by $1.6 billion -- the largest restatement of corporate earnings in U.S. history.
Grass and Brown have both denied any wrongdoing, and Bergonzi did not return calls from the AP seeking comment.
A fourth person named in the indictment, Eric Sorkin, 53, executive vice president for pharmacy services, was charged with conspiracy to obstruct justice and making false statements. A Rite Aid spokeswoman said Sorkin was suspended Friday. Sorkin hung up when reached by phone at home.
All four are scheduled to appear in federal court July 16.
Rite Aid, with 3,600 stores in 30 states and Washington, D.C., announced Friday that the SEC investigation into its financial reporting and accounting had ended without any fines against the company. It said it cooperated fully and admitted to no wrongdoing.
