Martin L Grass

Martin Grass, the son of Rite Aid Corporation’s founder, Alex Grass, began working full time at the pharmacy chain in 1978 at the age of 23. Grass took over the reins as CEO of the Camp Hill, Pennsylvania-based company in 1995. At that time, the chain had the most stores of any pharmacy in the US and was the second largest in terms of revenue. However, on October 18, 1999, Grass was forced to resign as CEO after the company’s stock fell from a high of $50 to less than $10 per share following the chain’s aggressive expansion plans faltered and added significant debt to the company’s balance sheet. Back in 1989, Grass was arrested for bribery, but was acquitted in 1991. In any event, on June 21, 2002, Grass and several other Rite Aid executives were indicted on multiple charges of conspiracy to defraud, making false statements and accounting fraud. The others indicted include Franklin Brown, former chief counsel and vice chairman, Franklyn Bergonzi, former EVP and CFO, and Eric Sorkin, EVP of Pharmacy Services. According to the indictment, Grass and his co-conspirators cooked the company books to the tune of $1.6 billion, forcing a restatement of earnings – the largest in history at that time. In May 2004, Grass reached a plea agreement with prosecutors whereby he would serve a minimum of 8 years, up to 10 years in prison, pay a $500,000 fine and forfeit $3 million in compensation to the US so that he “does not receive unjust enrichment” as a result of “bogus” backdated severance letters. His co-defendants all pleaded guilty in 2003. Sadly, Rite Aid founder Alex Grass passed away in August 2009 having witnessed his son’s near destruction of the company and ruination of the family name.