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Former Rite Aid Exec Is Convicted

October 18, 2003|From Reuters

Former Rite Aid Corp. Vice Chairman Franklin Brown was found guilty Friday on 10 criminal counts, including conspiracy and obstruction of justice, in one of the biggest corporate fraud cases in recent U.S. history.

Brown, 75, who also served as the drugstore chain's chief counsel, was found guilty of making false statements in filings to the Securities and Exchange Commission and obstructing a federal probe. He was acquitted on one count of wire fraud.

A federal jury of eight women and four men delivered the unanimous verdict in U.S. District Court in Harrisburg, Pa.

"We are obviously sad. We are obviously disappointed. But we are not shocked," Reid Weingarten, Brown's defense lawyer, said after the verdict was read.

Prosecutors said Brown helped orchestrate a series of fraud schemes in the late 1990s that led Rite Aid into a $1.6-billion restatement of earnings.

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