By  on August 22, 2011

Anthony Cuti, a former Duane Reade Inc. chairman, president and chief executive officer, was slapped with a three-year prison sentence Monday for inflating the New York-based drugstore’s income.

A former president of Supermarkets General and Pathmark, Cuti, 65, was also ordered to pay a $5 million fine by U.S. District Judge Deborah Batts.

The Saddle River, N.J., resident, who left Duane Reade in 2005 after working there for nine years, was convicted by a jury in June 2010 of securities fraud.

“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 Manhattan U.S. Attorney Preet Bharara. “He will now have to live with the consequences of his actions.”

Prosecutors trying the case said Cuti and then-chief financial officer William Tennant reported inflated income from fraudulent real estate deals and then made it appear as if expenses were decreasing through fictitious credits from vendors who worked for Duane Reade from 2000 to 2005.

Tennant was also found guilty and will be sentenced Aug. 29.

Duane Reade, which operates more than 253 stores, was acquired by Walgreen Co. early last year for $1.08 billion, including debt, from private-equity firm Oak Hill Capital Partners LP.

Duane Reade was publicly traded until it was acquired by Oak Hill in July 2004.

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