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Monus Fraud Trial Resumes

May 5, 1995

CLEVELAND (AP) _ The government’s key witness in the fraud trial of former Phar-Mor Inc. President Michael Monus testified Friday that Monus had received improper personal payments of company funds.

Former Phar-Mor Chief Financial Officer Patrick Finn, who returned to the stand for a second day, testified that Monus may have received $500,000 in improper payments during 1990-91.

Monus’ personal financial situation had been deteriorating and he was ``extremely cash poor,″ Finn said.

Phar-Mor, based in Youngstown, Ohio, was a privately held discount drug store chain when an alleged $1 billion fraud was made public in July 1992. Phar-Mor filed for Chapter 11 bankruptcy protection in August 1992.

Monus, 48, faces 96 counts of interstate transportation of stolen property, five counts of wire fraud, two counts each of bank fraud, mail fraud and filing false income tax returns, and single counts of obstruction of justice and conspiracy.

He is accused of using phony financial information to lure investments from banks, insurance companies and others. Prosecutors said he diverted millions of dollars to support his lavish lifestyle and the World Basketball League, a failed minor league sports venture.

The Securities and Exchange Commission on Tuesday filed a civil lawsuit seeking to bar Monus from serving as officer or director of a public company and return of ill-gotten gains.

Monus’ first trial ended with a hung jury last year. If convicted on all counts, Monus could be sentenced to 1,246 years in prison and fined $36 million.

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