Former Chief Counsel and Vice Chairman of Rite Aid’s Board of Directors Conviction Affirmed

March 1, 2010 - Dennis C. Pfannenschmidt, United States Attorney for the Middle District of Pennsylvania, announced today that the United States Court of Appeals for the Third Circuit has affirmed the conviction of Franklin Brown, age 82, and denied his request for a new trial. Brown is currently serving a 120-month prison sentence for conspiracy to commit accounting fraud, filing false statements with the SEC, conspiracy to obstruct justice, obstruction of grand jury proceedings, obstruction of government agency proceedings, and witness tampering. Brown was the former Chief Counsel and Vice Chairman of Rite Aid’s Board of Directors. He resided in Harrisburg, Pennsylvania.

Brown was indicted by a federal grand jury in June of 2002, as a result of an investigation by the Federal Bureau of Investigation.

Brown was convicted in October of 2003 following a jury trial of conspiracy to commit accounting fraud, filing false statements with the SEC, conspiracy to obstruct justice, obstruction of grand jury proceedings, obstruction of government agency proceedings, and witness tampering. In particular, the jury found that Brown had conspired to inflate Rite Aid’s reported earnings for fiscal year 1999, had conspired to create backdated severance letters awarding Brown and other executives millions of dollars in compensation, and had interfered with the government’s investigation of Rite Aid in a variety of ways. He was sentenced to a 120-month term of imprisonment.

In appealing his conviction, Brown claimed that the FBI had altered his taped recorded conversations with the former President of Rite Aid, Tim Noonan. The Third Circuit Court however, affirmed Brown’s conviction and denied his motion for a new trial.

The Court did vacate Brown’s sentence and remand the case back to Judge Sylvia Rambo for re-sentencing due to intervening changes in sentencing procedure.

“We are pleased with this ruling and look forward to the re-sentencing of Mr. Brown.” stated U.S. Attorney Pfannenschmidt, who noted that the case and appeal were handled by Assistant United States Attorney Kim Douglas Daniel.