Drugstore Exec Convicted in Fraud Scheme : Crime: Phar-Mor founder could face 1,246 years in prison, millions in fines. Appeal is planned.
A jury convicted former Phar-Mor Inc. President Michael Monus on Thursday of all 109 charges against him in a $1-billion fraud and embezzlement scheme that forced the discount drugstore chain he founded into bankruptcy.
Monus, 48, could face a sentence of up to 1,246 years in prison and $36 million in fines.
The U.S. District Court trial was Monus’ second. His first ended in a hung jury in June, and a federal investigation into allegations of jury tampering in that trial is continuing.
Prosecutors said Monus looted the company to bankroll a lavish lifestyle and prop up his failed World Basketball League sports venture. He was accused of diverting $8.8 million to the minor-league WBL and more than $500,000 for his own uses.
Monus smiled slightly and shook his head as the verdicts were announced. He was then ordered into custody and led away in handcuffs.
Judge George White rejected an initial defense request that Monus be released on bond prior to sentencing, but he said a hearing will be held on the issue, perhaps as early as next week.
Monus’ lead lawyer, J. Michael Murray, said he will appeal the verdicts.
Defense attorneys argued that Monus was the victim of his chief financial officer, Patrick Finn, who testified against him. The defense claimed that Finn and Phar-Mor’s chief executive, Pittsburgh grocery executive David Shapira, made Monus the scapegoat for their own wrongdoing and mismanagement.
Shapira has never been charged and has denied knowing of the fraud until after Monus was fired in 1992, a few weeks before Phar-Mor sought Chapter 11 bankruptcy protection.
Finn, who was also fired in 1992, pleaded guilty to fraud and tax charges and received a reduced sentence for cooperating with prosecutors and testifying against Monus.
Prosecutors said Monus’ fraud began in 1988 when he and Finn agreed to hide Phar-Mor’s losses by doctoring the Youngstown, Ohio-based company’s books.