Hard 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,...

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