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Last Rite Aid Defendant's Trial Date Set

Aug 14, 2003 | AP

Jury selection in the fraud and conspiracy trial of Rite Aid Corp.'s former chief counsel and board vice chairman will start in six weeks, U.S. District Judge Sylvia H. Rambo decided in a Thursday telephone conference with the prosecutor and defense lawyers.

The trial of 75-year-old Franklin C. Brown on 35 criminal counts is expected to last about two weeks. Five other company officials have pleaded guilty in the corporate accounting scandal and await sentencing.

Four of them have agreed to cooperate with prosecutors as a condition of their plea deals. ``It's reasonable to assume they'll be testifying at trial against Mr. Brown,'' said Assistant U.S. Attorney Kim Douglas Daniel.

Despite earlier delays, ``it looks pretty certain'' a trial will take place in September, said Brown defense lawyer Joseph U. Metz.

Jury selection begins Sept. 24, with opening statements to start five days later, Daniel said. Pretrial motions are due next Tuesday.

Brown has pleaded innocent to charges he conspired with other executives to falsely inflate the company's value and to interfere with federal investigators.

Accounting irregularities at Camp Hill-based Rite Aid led the company in July 2000 to lower reported net earnings by $1.6 billion. The stock price peaked at more than $50 a share in early 1999, but was trading at $4.48, up four cents on the New York Stock Exchange Thursday afternoon.

Rite Aid, the nation's third-largest drugstore chain, operates 3,390 stores in 28 states and the District of Columbia.

The counts against Brown are conspiracy, fraud in the purchase or sale of securities, conspiracy to obstruct justice, obstructing grand jury proceedings, obstructing proceedings of a government agency, witness tampering, 13 counts of lying to the Securities and Exchange Commission, 10 counts of mail fraud and six counts of wire fraud.

Brown, along with former chief executive officer Martin Grass and former chief financial officer Franklyn M. Bergonzi, was to stand trial in early June. But a guilty plea by Bergonzi four days before the trial halted proceedings. Grass pleaded guilty 12 days later.

Prosecutors have said they can't predict Brown's maximum sentence if convicted because of the complicated nature of federal sentencing guidelines. Prosecutors are seeking prison terms of up to eight years and fines against those who already pleaded guilty.

Federal prosecutors have said additional arrests could occur. Daniel on Thursday said they ``are still continuing to investigate certain aspects of the case.''

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