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Rite Aid indictments

This article was originally published in The Tan Sheet

Executive Summary

Leiner Health Products, Warner Lambert Consumer Healthcare (now part of Pfizer) among vendors defrauded in wide-ranging scheme by former and current Rite Aid executives to materially overstate the drug store chain's income between May 1997 and May 1999, federal prosecutors allege in recent indictments against the executives. Vendors were subject to "systematically inflated" charges for damaged, outdated merchandise (totaling $28 mil. in FY 1999) and/or "bogus" charges for items purportedly sold at clearance ($30 mil. in 1999). Indictment cites February 1999 invoices to Warner Lambert for $539,000 and Leiner for $508,000 as evidence of fraud conspiracy and mail fraud. Justice Department criminal charges and SEC accounting fraud charges against Rite Aid were filed June 21 in Harrisburg, Penn. federal court...

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