clock menu more-arrow no yes

Filed under:

PHAR-MOR SEEKS PROBE INTO POSSIBLE INSIDER FRAUD

Phar-Mor Inc., operating under Chapter 11 protection from creditors, said it has asked U.S. Bankruptcy Court to investigate an alleged $350 million insider fraud.

Spokeswoman Carol Robinson said the company asked Bankruptcy Judge William T. Bodoh late Wednesday to appoint an examiner to look into alleged fraud by Phar-Mor's ex-president and its former chief financial officer.Last month, the company made a similar request to the U.S. attorney's office and the FBI.

The latest request is a common practice in bankruptcy court proceedings when insider fraud is suspected, Robinson said.

The judge is on vacation and isn't likely to see the request until Monday, his court staff said today. At that point, the judge will give other interested parties a chance to comment on the request.

The company has charged that former president Michael I. Monus and former chief financial officer, Patrick Finn, embezzled money from the company and misrepresented the company's worth.

No criminal charges have been filed. Monus and Finn have hired attorneys but have declined any detailed comment on Phar-Mor's charges.

Phar-Mor filed for protection from creditors under Chapter 11 on Aug. 17. The deep-discount drugstore chain based in Youngstown has more than 300 stores.