Ex-Rite Aid chief counsel gets 10-year term

Federal judge rejects plea for no prison time in fraud

October 15, 2004|By BLOOMBERG NEWS

HARRISBURG - Franklin C. Brown, a former Rite Aid Corp. chief counsel convicted of accounting fraud, was sentenced to 10 years in prison yesterday by a judge who rejected his arguments that the term would be a death sentence because he is 76 and ill.

Brown was convicted last October of conspiring to inflate earnings at Rite Aid, the No. 3 U.S. drugstore chain, witness tampering and obstructing justice. Before the trial, he signed a plea agreement that would have brought him a much lighter sentence, but changed his mind and gambled on an acquittal at trial.

Defense lawyers asked the judge to spare Brown a prison term, saying his cardiac problems could result in a heart attack or stroke within three years of his imprisonment.

Prosecutors opposed the request and asked U.S. District Judge Sylvia Rambo for a term of 10 to 12 1/2 years. Brown apologized to his family and asked for mercy.

"Being accused and convicted of a crime has been one of the most painful and humbling experiences of my life," Brown told Rambo yesterday. "I ask you to grant me whatever mercy and leniency you can."

Rambo imposed a $21,000 fine. and said she would recommend to federal prison officials that Brown serve his sentence in a medical facility near his home in Susquehanna Township, Pa. Federal law bars parole and requires him to complete at least 85 percent of his term.

Prosecutors asked Rambo to order Brown to pay $10.4 million in restitution and fine him as much as $175,000. The judge didn't order restitution.

Brown was the last of six executives that Rambo sentenced for their roles in a fraud that led Rite Aid to erase $1.6 billion in profit in July 2000. The judge sentenced four other former Rite Aid executives to lesser prison terms, including Martin L. Grass, the former chief executive, who got eight years in prison. Former President Timothy Noonan, who helped prosecutors secretly videotape Grass and Brown, got two years probation. Noonan testified for prosecutors at Brown's trial, where jurors saw videotapes of the two men discussing a cover-up.

At yesterday's hearing, Assistant U.S. Attorney Kim Daniel urged Rambo to give Brown at least a decade behind bars because he was the prime architect of a sweeping cover-up, he showed no remorse, and his crimes led to losses of at least $23 million.

Defense attorneys called Brown a "cardiovascular time bomb" who got a pacemaker and heart stent last week. They said Rite Aid's former vice chairman should receive probation or a term of home confinement. They also argued that he could be assaulted in prison and that he should get credit for his charitable donations and acts.

Rambo said federal prisons are equipped to handle his medical problems, and the threat of assault wasn't relevant.

Brown's lawyers promised to appeal the sentence.

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