Risk Management

Rite Aid Plea Agreement Thrown Out

Federal judge says that eight years in prison is not enough.
Stephen TaubApril 22, 2004

About two weeks after a judge threw out the plea bargain for former Enron treasurer Lea Fastow, another high-profile corporate case has seen a plea deal set aside.

Yesterday a federal judge rejected a plea agreement by prosecutors with Martin Grass, the former chief executive of Rite Aid Corp., saying the eight-year prison sentence he had agreed to serve was too short, according to Reuters.

Judge Sylvia Rambo of the U.S. District Court for the Middle District of Pennsylvania, in Harrisburg, explained that the government did not have the right to reduce the sentence from the guidelines of 9 to 10 years, according to the wire service’s account of the court filing. She added that the parties did not reach a plea agreement far enough in advance of the scheduled trial date for the court to avoid trial preparation.

Judge Rambo also noted that Grass may change his plea at a hearing scheduled for next week.

Last June, Grass pleaded guilty to fraud, obstruction of justice, and other criminal counts relating to a $1.6 billion overstatement of Rite Aid’s profits in the late 1990s.

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