cjjack
06-25-2004, 10:13 AM
Ex-CEO assigned to minimum-security Eglin, source says
Thursday, June 24, 2004 BY TOM DOCHAT
Of The Patriot-News
Martin L. Grass, former chairman and CEO of Rite Aid Corp., has been assigned to a minimum-security prison camp on Florida's Gulf Coast to serve his sentence for conspiracy, a source said.
Grass, 50, is to report to the federal prison in Eglin, Fla., by 1 p.m. Monday to begin serving his 8-year sentence. He pleaded guilty a year ago to conspiracy to defraud and conspiracy to obstruct justice in connection with accounting irregularities at the drugstore chain in the late 1990s. He was sentenced last month in U.S. Middle District Court in Harrisburg.
During his sentencing, Grass -- who lives in Boca Raton, Fla., with his wife and three school-age children -- had requested placement at Eglin, a 28-acre campus that is adjacent to Eglin Air Force Base in the Florida panhandle.
David P. Novak, a former inmate at Eglin who is a consultant for people facing federal incarceration, said Eglin is part of a "bucolic setting" that is often referred to as "Club Fed."
But, Novak said, "Make no mistake, it is definitely a prison."
Dan Dunne, a spokesman for the Federal Bureau of Prisons, said Eglin is a work camp where inmates are required to work 71/2 hours a day at wages of 12 cents to 40 cents an hour. Work includes food service, sanitation jobs in the housing units and groundskeeping.
Crowded quarters:
Novak said Eglin generally houses 700 to 1,000 inmates, with as many as 80 percent of them serving sentences for drug crimes, not white-collar crimes. A prison camp such as Eglin is intended to house inmates who are considered nonviolent criminals and those with good behavior who are nearing the end of their sentences.
"It is a high-density living environment," said Novak, a former flight school owner who served nearly a year at Eglin in 1997 for mail fraud.
He said inmates live in a dormitory-style arrangement, with 200 housed in space the size of half a basketball court. Within that space, inmates sleep in bunk beds in 4- by 61/2-foot cubicles that also have a metal folding chair and a small writing desk, he said.
"It's loud, noisy," he said, noting that vulgarities are commonly heard.
When reporting to prison, people are advised "not to bring a whole lot" of personal property, Dunne said. "Anything they need will be provided" or can be purchased through the commissary, he said.
Novak said he advises clients not to bring close family members when they report.
The initial screening process, he said, generally takes two to four hours.
Novak said reporting inmates empty their pockets and discard their clothing, are strip-searched, and are then given temporary prison clothing. Fingerprints are taken, as well as photos.
He said prisoners also will be interviewed on health and social issues, and they will fill out "all sorts of forms" involving mail correspondence and phone calls.
The only personal items an inmate may retain are a wedding band and a religious medallion, eyeglasses, dental devices and legal paper work, according to Novak.
He said toiletries are purchased at the commissary, where inmates also can buy postage stamps, snacks and writing paper.
Novak, who wrote a book, "Downtime: A Guide to Federal Incarceration," after his prison term, said it can be difficult for a white-collar professional to adjust to prison. He said former executives typically have been rewarded for being "aggressive, take-charge, type-A people."
In prison, "you are in a situation where you are totally out of your control. It is very humbling, very depressing, very shameful, a very tough thing to deal with emotionally," he explained.
But Novak said he advises his clients to "look in the mirror and accept full responsibility -- that you put yourself in this position."
"Prison is the great equalizer," he added. People "very quickly simply become another inmate."
Growth strategy failed:
Grass will have to serve at least 85 percent of his sentence, or a minimum of six years and 10 months.
He is one of the first high-level executives to begin a prison sentence in connection with the wave of corporate corruption in the past few years. Rite Aid's new management said the company overstated its earnings by about $1.6 billion in the late 1990s as a result of deceptive accounting.
Grass, son of company founder Alex Grass, became the chairman and CEO of East Pennsboro Twp.-based Rite Aid in March 1995. He embarked on a strategy to build the chain into a national powerhouse through acquisitions and construction of larger stores. The strategy was well-received, and the stock price eventually rose to as high as $50 a share in early 1999.
But the company's underlying finances and infrastructure could not keep up with the growth. Rite Aid announced in March 1999 that financial results for its fiscal fourth quarter would fall well below expectations. That sent the stock price plummeting and set off a whirlwind of events that eventually led to Grass' ouster in October 1999.
Grass and three other company executives were indicted in June 2002 on multiple charges related to the accounting irregularities. In all, six former Rite Aid executives have pleaded guilty or been convicted on charges linked to the scandal.
Grass pleaded guilty on June 17, 2003, and agreed to cooperate with the government. As part of his sentence, he was fined $500,000.
Grass previously paid $3 million in a forfeiture involving 83 acres in Fairview Twp. that he co-owned and were once eyed for Rite Aid headquarters.
TOM DOCHAT: 255-8216 or tdochat@patriot-news.com
Thursday, June 24, 2004 BY TOM DOCHAT
Of The Patriot-News
Martin L. Grass, former chairman and CEO of Rite Aid Corp., has been assigned to a minimum-security prison camp on Florida's Gulf Coast to serve his sentence for conspiracy, a source said.
Grass, 50, is to report to the federal prison in Eglin, Fla., by 1 p.m. Monday to begin serving his 8-year sentence. He pleaded guilty a year ago to conspiracy to defraud and conspiracy to obstruct justice in connection with accounting irregularities at the drugstore chain in the late 1990s. He was sentenced last month in U.S. Middle District Court in Harrisburg.
During his sentencing, Grass -- who lives in Boca Raton, Fla., with his wife and three school-age children -- had requested placement at Eglin, a 28-acre campus that is adjacent to Eglin Air Force Base in the Florida panhandle.
David P. Novak, a former inmate at Eglin who is a consultant for people facing federal incarceration, said Eglin is part of a "bucolic setting" that is often referred to as "Club Fed."
But, Novak said, "Make no mistake, it is definitely a prison."
Dan Dunne, a spokesman for the Federal Bureau of Prisons, said Eglin is a work camp where inmates are required to work 71/2 hours a day at wages of 12 cents to 40 cents an hour. Work includes food service, sanitation jobs in the housing units and groundskeeping.
Crowded quarters:
Novak said Eglin generally houses 700 to 1,000 inmates, with as many as 80 percent of them serving sentences for drug crimes, not white-collar crimes. A prison camp such as Eglin is intended to house inmates who are considered nonviolent criminals and those with good behavior who are nearing the end of their sentences.
"It is a high-density living environment," said Novak, a former flight school owner who served nearly a year at Eglin in 1997 for mail fraud.
He said inmates live in a dormitory-style arrangement, with 200 housed in space the size of half a basketball court. Within that space, inmates sleep in bunk beds in 4- by 61/2-foot cubicles that also have a metal folding chair and a small writing desk, he said.
"It's loud, noisy," he said, noting that vulgarities are commonly heard.
When reporting to prison, people are advised "not to bring a whole lot" of personal property, Dunne said. "Anything they need will be provided" or can be purchased through the commissary, he said.
Novak said he advises clients not to bring close family members when they report.
The initial screening process, he said, generally takes two to four hours.
Novak said reporting inmates empty their pockets and discard their clothing, are strip-searched, and are then given temporary prison clothing. Fingerprints are taken, as well as photos.
He said prisoners also will be interviewed on health and social issues, and they will fill out "all sorts of forms" involving mail correspondence and phone calls.
The only personal items an inmate may retain are a wedding band and a religious medallion, eyeglasses, dental devices and legal paper work, according to Novak.
He said toiletries are purchased at the commissary, where inmates also can buy postage stamps, snacks and writing paper.
Novak, who wrote a book, "Downtime: A Guide to Federal Incarceration," after his prison term, said it can be difficult for a white-collar professional to adjust to prison. He said former executives typically have been rewarded for being "aggressive, take-charge, type-A people."
In prison, "you are in a situation where you are totally out of your control. It is very humbling, very depressing, very shameful, a very tough thing to deal with emotionally," he explained.
But Novak said he advises his clients to "look in the mirror and accept full responsibility -- that you put yourself in this position."
"Prison is the great equalizer," he added. People "very quickly simply become another inmate."
Growth strategy failed:
Grass will have to serve at least 85 percent of his sentence, or a minimum of six years and 10 months.
He is one of the first high-level executives to begin a prison sentence in connection with the wave of corporate corruption in the past few years. Rite Aid's new management said the company overstated its earnings by about $1.6 billion in the late 1990s as a result of deceptive accounting.
Grass, son of company founder Alex Grass, became the chairman and CEO of East Pennsboro Twp.-based Rite Aid in March 1995. He embarked on a strategy to build the chain into a national powerhouse through acquisitions and construction of larger stores. The strategy was well-received, and the stock price eventually rose to as high as $50 a share in early 1999.
But the company's underlying finances and infrastructure could not keep up with the growth. Rite Aid announced in March 1999 that financial results for its fiscal fourth quarter would fall well below expectations. That sent the stock price plummeting and set off a whirlwind of events that eventually led to Grass' ouster in October 1999.
Grass and three other company executives were indicted in June 2002 on multiple charges related to the accounting irregularities. In all, six former Rite Aid executives have pleaded guilty or been convicted on charges linked to the scandal.
Grass pleaded guilty on June 17, 2003, and agreed to cooperate with the government. As part of his sentence, he was fined $500,000.
Grass previously paid $3 million in a forfeiture involving 83 acres in Fairview Twp. that he co-owned and were once eyed for Rite Aid headquarters.
TOM DOCHAT: 255-8216 or tdochat@patriot-news.com