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Time - Man of the Year
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Time_Man_of_the_Year_Compact_Publishing_3YX-Disc-1_Compact_Publishing_1993.iso
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moy
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081792
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08179914.000
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1993-04-08
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THE WEEK, Page 16BUSINESSHard Pills to Swallow
Phar-Mor says executives stole $10 million and faked $340 million
profit
As the scrappy co-founder and president of Phar-Mor, the
largest U.S. deep-discount drugstore chain, Michael Monus was
known for his love of sports and for expanding the firm at a
breakneck pace. But most of the profits the Ohio-based company
(sales: $3.14 billion) reported for the past three years were
apparently phony.
Phar-Mor said Monus, 44, and chief financial officer
Patrick Finn, 34, both fired two weeks ago, funneled about $10
million of company funds into the struggling World Basketball
League, which folded Aug. 1. The firm says the two men
participated in a scheme to cook the company's books, forcing
it to write off $350 million -- including the allegedly stolen
funds and $340 million in overstated profits. The privately held
concern has dismissed auditor Coopers & Lybrand, which it blamed
for failing to spot the fraud. The accounting firm says
Phar-Mor's move was "apparently designed to posture, bluster and
transfer blame."
The disclosures led Phar-Mor to lay off 100 of its 800
headquarters employees and could brake the chain's headlong
expansion. Beginning with a single store a decade ago, Phar-Mor
grew to 305 outlets in 33 states and employs 23,000 workers.