Ex-Rite Aid CEO gets 8 years in prison for accounting fraud scheme

HARRISBURG (AP) -- Former Rite Aid Corp. chief executive Martin L. Grass was sentenced to eight years in prison Thursday for conspiring to falsely inflate the value of the company his father founded more than four decades ago and cover up the scheme.
Grass, 50, who headed the nation's third-largest pharmacy chain in the late 1990s before being forced out in October 1999, also was fined $500,000 and given three years' probation for his role in a billion-dollar accounting fraud that sent the company's stock tumbling.
Before U.S. District Judge Sylvia H. Rambo handed down the sentence, Grass apologized to Rite Aid, its stockholders and employees.
On the eve of a trial that was to start last June, Grass pleaded guilty to conspiracy to defraud Rite Aid and its shareholders and conspiracy to obstruct justice in a deal that required him to cooperate with prosecutors.
Assistant U.S. Attorney Kim Douglas Daniel described Grass' crimes: The company made millions from improper vendor charges and recorded income improperly; $2.8 million in company funds were used for a land deal that benefited Grass personally; and after he left the company, Grass issued seven backdated severance letters to fellow executives worth a combined $23 million.
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