Former Duane Reade CEO Sentenced to Three Years in Prison
DOWNTOWN — The former CEO of Duane Reade was sentenced to three years in prison Monday in Manhattan Federal Court for falsely inflating the drugstore's income and expenses, the U.S. Attorney's Office said.
Anthony Cuti, 65, was charged with reporting inflated earnings from fraudulent real estate transactions and reducing expenses through fake credits from the chain's vendors while working for the company from 2000 through 2005.
The former CEO was also ordered to pay a $5 million fine.
“Anthony Cuti’s breach of his fiduciary duty to Duane Reade, its board of directors, auditors and investors was as egregious as it was audacious," said Preet Bharara, US Attorney in the Southern District of New York. "He will now have to live with the consequences of his actions.”
In some instances, Cuti told vendors they could rebill Duane Reade for credits at a later date, lowering the company's expenses by hiding money promised to the vendors, prosecutors said. He denied any wrongdoing.
"I have always led my life in a way to try to do the right thing," he told reporters at the courthouse before the sentencing. "I always thought I acted for the shareholders first and foremost and with integrity."
Cuti was tried along with former company CFO William Tennant, who was also found guilty of securities fraud.
Tennant, 64, is scheduled for sentencing on August 29th.
The drugstore chain was acquired by a private-equity firm in 2004 and then bought by Walgreeens in 2010.