Rite Aid Secret Tapes Ruled Admissible

U.S. prosecutors acted legally in using Rite Aid Corp.’s ex-president to make secret recordings of two other executives of the No. 3 drugstore chain and may submit the tapes to prove the pair obstructed an accounting fraud investigation, a judge ruled.

The ex-president, Timothy Noonan, taped former Chief Executive Martin Grass and ex-Chief Counsel Franklin Brown in 2001 while discussing the case. Grass, Brown and former Chief Financial Officer Frank Bergonzi were indicted in June on charges of obstructing justice and running an accounting fraud that led Rite Aid to restate $1.6 billion in profit.

Grass and Brown will go on trial June 9 in Harrisburg, Pa. The two former executives had asked U.S. District Judge Sylvia Rambo, who is presiding over the case, to bar the tapes.