NEW YORK – The former chief executive of Duane Reade Inc. was sentenced Monday to three years in prison for exaggerating the New York City drugstore chain's income.
Anthony Cuti, 65, of Saddle River, N.J., also was ordered to pay a $5 million fine by U.S. District Judge Deborah A. Batts, who called him a "gifted, arrogant, driven and entitled individual who betrayed his position as CEO." He must report to prison in January to begin serving his sentence.
Cuti was convicted in June 2010 of securities fraud after a two-month trial in which jurors concluded he had plotted to falsely inflate the income and reduce the expenses that Duane Reade reported to investors.
Batts acknowledged that Cuti had rescued Duane Reade from near bankruptcy, helping it grow into the metropolitan area's largest drugstore chain, but she said he also "bullied people into committing fraudulent acts to make the company look like it was doing better than it actually was."
Before he was sentenced, Cuti apologized to his family but insisted his intentions were honorable.
"I always felt I acted with the shareholders' interests first and foremost. And that I acted with integrity," he said. "It's very, very confusing, if not incomprehensible to be here today, tried and convicted of a crime. A conviction is so at odds with all I've tried to be."
Defense attorney Reid Weingarten said his client was left humiliated, embarrassed and ashamed by his ordeal, but he asked that he be given leniency because of his charitable acts and devotion to family and friends.
"He's much more than a guy who opened a lot of drugstores in Manhattan," he said.
Assistant U.S. Attorney Jonathan Streeter said Cuti deserved a "substantial term of imprisonment" because his offense was serious and long running and because Cuti lied when he was caught.
U.S. Attorney Preet Bharara said Cuti's crime was "as egregious as it was audacious. He will now have to live with the consequences of his actions."
The Securities and Exchange Commission said Cuti and another executive at the company overstated the chain's pretax income by a total of approximately $17.5 million between 2000 and 2004.