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Rite Aid jurors begin deliberations
Federal jury to begin deliberations Wednesday over fate of 75-year-old former vice chairman.
October 14, 2003: 6:51 PM EDT

HARRISBURG, Pa. (Reuters) - A federal jury was expected to begin deliberating Wednesday over the fate of former Rite Aid Corp. Vice Chairman Franklin Brown following a two-week trial in one of the biggest fraud cases in modern corporate America.

Brown, 75, who also served as the drugstore chain's chief counsel, faces multiple felony counts including fraud and obstruction of justice for what prosecutors say was his central role in a massive conspiracy by senior officers to inflate Rite Aid (RAD: Research, Estimates) profits and reap rich rewards through executive compensation schemes.

Five other executives, including former CEO Martin Grass, have already pleaded guilty to wrongdoing, and all but Grass testified against Brown during the trial that began Sept. 29 in federal district court in Harrisburg.

U.S. District Judge Sylvia Rambo said Tuesday that she would charge the jury of eight women and four men early Wednesday so that they could begin deliberations around mid-morning.

Brown was named as a co-defendant in a 36-count federal grand jury indictment that charges him with helping Grass and former Chief Financial Officer Frank Bergonzi in a series of fraudulent schemes to doctor Rite Aid's books. Authorities also say he knowingly distributed bogus severance letters to co-conspirators and urged witnesses to lie to the FBI and the grand jury.

But jurors on Tuesday heard an impassioned plea from Brown attorney Reid Weingarten, who urged the panel to view the defendant as a kindly, well-meaning old man whose main fault was in being generous to underlings and loyal to colleagues as legal adviser to Rite Aid's senior managers.

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"The god of justice will not weep if you find him not guilty," Weingarten said in his closing argument, contending that Brown played no part in fraudulent activities at the company but instead had fallen prey to guilty executives intent on winning themselves lenient sentences.

"Franklin Brown is not responsible for everything Martin Grass did," the defense attorney added, charging that prosecutors failed to put Grass on the witness stand because his testimony would have exonerated Brown.

Assistant U.S. Attorney Kim Daniel, whose case included surreptitiously recorded audio and videotapes of Brown's conversations with former Rite Aid President Timothy Noonan, asked the jury to consider the defendant's clandestine meetings with executives who would later lie to investigators and grand jurors.

"How many lawyers do you know who have to use calling cards and pay phones to speak to their clients?" Daniel asked. "Franklin Brown was doing nothing other than obstructing justice."

Prosecutors say Brown aided a company accounting scheme to book $75.6 million in incomplete rebate agreements from pharmaceutical vendors as income, helped hide Grass' personal role in a $2.6 million real estate deal and distributed eight back-dated severance letters worth $16 million.

Grass, Bergonzi, former Vice President Eric Sorkin and former Senior Vice President Philip Markovitz pleaded guilty earlier this year to conspiracy. Each faces the prospect of prison.

Noonan pleaded guilty last summer to a charge of failing to report a felony. He was expected to be sentenced to probation after cooperating early with investigators and serving as a prime prosecution witness at Brown's trial.  Top of page




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