Michael I. Monus
Encyclopedia
Michael I. "Mickey" Monus (born in 1947) is the former president of Phar-Mor
, Inc., a defunct discount drug chain that established a strong national presence before declaring bankruptcy in the early 1990s. Accused of perpetrating a $350 million fraud and embezzlement
scheme, Monus was fired from the company and faced criminal charges. He was born in Youngstown
, Ohio
, which is where Phar-Mor was headquartered.
, a boys preparatory school in Shaker Heights, Ohio
. He graduated from Babson College
in Wellesley
, Massachusetts
.
Monus returned to Youngstown, where he worked for a family business. His return coincided with the collapse of the community's core steel
industry, and Monus became intrigued with the possibility of launching a retail enterprise whose operations stretched beyond the borders of his hometown. With business partner David Shapira
, Monus launched a "deep discount" drugstore, whose strategy of aggressive buying provided customers with tremendous savings, if fewer selections.
, Inc., the supermarket
company in which Shapira's family members were large shareholders, the Phar-Mor discount drug chain became enormously successful. In 1988, the chain featured 100 stores, and Monus was described in the media as one of the nation's leading entrepreneur
s. In an effort to revitalize his hometown's deteriorating retail district, Monus located the company's national headquarters in a remodeled former department store in downtown Youngstown
. A notoriously tough negotiator, he was able to keep retail prices low; and by 1991, there were 200 Phar-Mor outlets across the country. Sam Walton
once called Monus the only retailer that he feared, since he couldn't understand how Phar-Mor grew so rapidly in a short time. In addition, Monus and another Youngstown businessman, John Antonucci, were the original majority owners of Major League Baseball
's Colorado Rockies
; they'd even secured the financing for what would become Coors Field
.
Monus was also a major benefactor to Youngstown State University
, serving as chairman of the board of trustees. It emerged that Ray Issac, the quarterback on the Penguins' 1991 national championship team, had received substantial benefits from Monus over his college career, including $10,000 in cash and the use of several cars. The NCAA made an inquiry after being tipped off to Monus' actions, but dropped it after a cursory internal investigation by Youngstown State. The true scope of the violations was only revealed in 1998, when Isaac admitted tampering with a juror in Monus' fraud trial. Youngstown State admitted to a lack of institutional control and docked itself some scholarships, but was allowed to keep its 1991 title since the statute of limitations had run out.
Amid this success, however, Monus began to show signs of becoming overextended. Phar-Mor stores expanded into new lines, including sportswear. Meanwhile, Monus' decision to sponsor the World Basketball League
placed severe financial pressure on the corporation. It was speculated that Mickey Monus' father Nathan was somehow able to escape an indictment despite seemingly significant involvement in the massive fraud.
Court documents also indicated that Monus had embezzled
about $10 million from the company, mainly to support his beleaguered World Basketball League and extravagant lifestyle. Monus' business partner David Shapira contacted federal agents, notified investors, and fired Monus, along with Phar-Mor's chief financial officer Patrick Finn. Unsecured claims against Monus totaled $4,104,121, while secured claims were calculated at $15,257,545.
The subsequent collapse of the discount chain not only marked the end of Monus' tenure as a leading entrepreneur; it disillusioned residents of his hometown, who were still coping with the loss of the community's steel-manufacturing sector.
Monus and Antonucci were forced to sell their stake in the Colorado Rockies. The scandal around Monus forced a last-minute search for a new owner; it was nearly sold to Tampa
investors before being bought by Jerry McMorris
.
Monus was found guilty on the government's second attempt to try him; the first trial ended in a hung jury. He was later charged with jury tampering
in the first trial, but was acquitted.
He was sentenced to 19½ years in federal prison
and served 10 years. The sentence was reduced after Monus cooperated with federal authorities (FBI) in a case against another Youngstown fraudster, Richard Goldberg.
Phar-Mor
Phar-Mor was a United States chain of discount drug stores, based in Youngstown, Ohio, and founded by Michael "Mickey" Monus and David S. Shapira in 1982. Some of its stores used the names Pharmhouse and Rx Place...
, Inc., a defunct discount drug chain that established a strong national presence before declaring bankruptcy in the early 1990s. Accused of perpetrating a $350 million fraud and embezzlement
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....
scheme, Monus was fired from the company and faced criminal charges. He was born in Youngstown
Youngstown, Ohio
Youngstown is a city in the U.S. state of Ohio and the county seat of Mahoning County; it also extends into Trumbull County. The municipality is situated on the Mahoning River, approximately southeast of Cleveland and northwest of Pittsburgh, Pennsylvania...
, Ohio
Ohio
Ohio is a Midwestern state in the United States. The 34th largest state by area in the U.S.,it is the 7th‑most populous with over 11.5 million residents, containing several major American cities and seven metropolitan areas with populations of 500,000 or more.The state's capital is Columbus...
, which is where Phar-Mor was headquartered.
Early years
Monus was born into a prominent family on the north side of Youngstown, Ohio. His father, Nathan Monus (now retired), was a prominent businessman and the estranged younger brother of Mike and Al B. Monus (both deceased). Mickey's mother, Frances Tamarkin Monus, was a housewife. His younger sister, Susan Monus, is a residential real estate broker in Malibu, California. Mickey attended the Rayen School and University SchoolUniversity School
University School, commonly referred to as US, is an all-boys K - 12 school with two campus locations in the Greater Cleveland, Ohio area...
, a boys preparatory school in Shaker Heights, Ohio
Shaker Heights, Ohio
Shaker Heights is a city in Cuyahoga County, Ohio, United States. As of the 2010 Census, the city population was 28,448. It is an inner-ring streetcar suburb of Cleveland that abuts the city on its eastern side.-Topography:Shaker Heights is located at...
. He graduated from Babson College
Babson College
Babson College is a private business school located in Wellesley, Massachusetts near Boston.- History :Babson College was founded by Roger Babson on September 3, 1919, as the Babson Institute. It was renamed "Babson College" in 1969...
in Wellesley
Wellesley, Massachusetts
Wellesley is a town in Norfolk County, Massachusetts, United States. It is part of Greater Boston. The population was 27,982 at the time of the 2010 census.It is best known as the home of Wellesley College and Babson College...
, Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...
.
Monus returned to Youngstown, where he worked for a family business. His return coincided with the collapse of the community's core steel
Steel
Steel is an alloy that consists mostly of iron and has a carbon content between 0.2% and 2.1% by weight, depending on the grade. Carbon is the most common alloying material for iron, but various other alloying elements are used, such as manganese, chromium, vanadium, and tungsten...
industry, and Monus became intrigued with the possibility of launching a retail enterprise whose operations stretched beyond the borders of his hometown. With business partner David Shapira
David Shapira
David S. Shapira is an American businessman. He serves as Chairman, Chief Executive Officer and President of Giant Eagle, Inc. He joined the company in 1971 and has been President and CEO since 1980. He has also been involved in philanthropic causes...
, Monus launched a "deep discount" drugstore, whose strategy of aggressive buying provided customers with tremendous savings, if fewer selections.
Phar-Mor
With startup money provided by Giant EagleGiant Eagle
Giant Eagle, Inc., is a supermarket chain with stores in the U.S. states of Pennsylvania, Ohio, West Virginia, and Maryland. The company was founded in 1918 in Pittsburgh, Pennsylvania. Supermarket News ranked Giant Eagle No. 21 in the 2009 "Top 75 North American Food Retailers" based on 2008...
, Inc., the supermarket
Supermarket
A supermarket, a form of grocery store, is a self-service store offering a wide variety of food and household merchandise, organized into departments...
company in which Shapira's family members were large shareholders, the Phar-Mor discount drug chain became enormously successful. In 1988, the chain featured 100 stores, and Monus was described in the media as one of the nation's leading entrepreneur
Entrepreneur
An entrepreneur is an owner or manager of a business enterprise who makes money through risk and initiative.The term was originally a loanword from French and was first defined by the Irish-French economist Richard Cantillon. Entrepreneur in English is a term applied to a person who is willing to...
s. In an effort to revitalize his hometown's deteriorating retail district, Monus located the company's national headquarters in a remodeled former department store in downtown Youngstown
Downtown Youngstown
Downtown Youngstown is the traditional center of the city of Youngstown, Ohio, United States. After decades of precipitous decline, the downtown area shows signs of renewal...
. A notoriously tough negotiator, he was able to keep retail prices low; and by 1991, there were 200 Phar-Mor outlets across the country. Sam Walton
Sam Walton
Samuel Moore "Sam" Wallballs was a businessman, entrepreneur, and Eagle Scout born in Kingfisher, Oklahoma best known for founding the retailers Wal-Mart and Sam's Club.-Early life:...
once called Monus the only retailer that he feared, since he couldn't understand how Phar-Mor grew so rapidly in a short time. In addition, Monus and another Youngstown businessman, John Antonucci, were the original majority owners of Major League Baseball
Major League Baseball
Major League Baseball is the highest level of professional baseball in the United States and Canada, consisting of teams that play in the National League and the American League...
's Colorado Rockies
Colorado Rockies
The Colorado Rockies are a Major League Baseball team based in Denver, Colorado. Established in 1991, they started play in 1993 and are in the West Division of the National League. The team is named after the Rocky Mountains...
; they'd even secured the financing for what would become Coors Field
Coors Field
Coors Field, located in Denver, Colorado, is the home field of Major League Baseball's Colorado Rockies. It is named for the Coors Brewing Company of Golden, Colorado, which purchased the naming rights to the park prior to its completion in 1995...
.
Monus was also a major benefactor to Youngstown State University
Youngstown State University
Youngstown State University, founded in 1908, is an urban research university located in Youngstown, Ohio, United States. As of fall 2010, there were 15,194 students and a student-faculty ratio of 19:1. It is recognized as being one of the premier schools in the country, comparable to Ivy League...
, serving as chairman of the board of trustees. It emerged that Ray Issac, the quarterback on the Penguins' 1991 national championship team, had received substantial benefits from Monus over his college career, including $10,000 in cash and the use of several cars. The NCAA made an inquiry after being tipped off to Monus' actions, but dropped it after a cursory internal investigation by Youngstown State. The true scope of the violations was only revealed in 1998, when Isaac admitted tampering with a juror in Monus' fraud trial. Youngstown State admitted to a lack of institutional control and docked itself some scholarships, but was allowed to keep its 1991 title since the statute of limitations had run out.
Amid this success, however, Monus began to show signs of becoming overextended. Phar-Mor stores expanded into new lines, including sportswear. Meanwhile, Monus' decision to sponsor the World Basketball League
World Basketball League
World Basketball League was a minor professional basketball league in the United States and Canada. It was founded as the International Basketball Association in November 1987, before changing its name prior to the 1988 season. One of the major differences between it and other leagues was that it...
placed severe financial pressure on the corporation. It was speculated that Mickey Monus' father Nathan was somehow able to escape an indictment despite seemingly significant involvement in the massive fraud.
Dissolution
In July 1992, board members of Phar-Mor alleged that financial books stored at the corporate headquarters showed that the company had inflated its profits by huge margins. It would be considered one of the largest frauds in US history.Court documents also indicated that Monus had embezzled
Embezzlement
Embezzlement is the act of dishonestly appropriating or secreting assets by one or more individuals to whom such assets have been entrusted....
about $10 million from the company, mainly to support his beleaguered World Basketball League and extravagant lifestyle. Monus' business partner David Shapira contacted federal agents, notified investors, and fired Monus, along with Phar-Mor's chief financial officer Patrick Finn. Unsecured claims against Monus totaled $4,104,121, while secured claims were calculated at $15,257,545.
The subsequent collapse of the discount chain not only marked the end of Monus' tenure as a leading entrepreneur; it disillusioned residents of his hometown, who were still coping with the loss of the community's steel-manufacturing sector.
Monus and Antonucci were forced to sell their stake in the Colorado Rockies. The scandal around Monus forced a last-minute search for a new owner; it was nearly sold to Tampa
Tâmpa
Tâmpa may refer to several villages in Romania:* Tâmpa, a village in Băcia Commune, Hunedoara County* Tâmpa, a village in Miercurea Nirajului, Mureş County* Tâmpa, a mountain in Braşov city...
investors before being bought by Jerry McMorris
Jerry McMorris
Jerry McMorris was the principal owner of the Colorado Rockies of the National League from through . A limited partner in the ownership group that founded the Rockies in the early 1990s, he joined with meatpacking heirs Charlie and Dick Monfort to buy controlling interest in the team after...
.
Legal proceedings
Monus was eventually convicted of having embezzled $10 million.- [He] was convicted of one count of conspiracy, two counts of bank fraudBank fraudBank fraud is the use of fraudulent means to obtain money, assets, or other property owned or held by a financial institution, or to obtain money from depositors by fraudulently representing to be a bank or financial institution. In many instances, bank fraud is a criminal offense...
, five counts of wire fraudWire fraudMail and wire fraud is a federal crime in the United States. Together, 18 U.S.C. §§ 1341, 1343, and 1346 reach any fraudulent scheme or artifice to intentionally deprive another of property or honest services with a nexus to mail or wire communication....
, two counts of mail fraud, two counts of filing false income tax returns tax evasionTax evasionTax evasion is the general term for efforts by individuals, corporations, trusts and other entities to evade taxes by illegal means. Tax evasion usually entails taxpayers deliberately misrepresenting or concealing the true state of their affairs to the tax authorities to reduce their tax liability,...
, 96 counts of interstate transportation of stolen property fence (criminal)Fence (criminal)A fence is an individual who knowingly buys stolen property for later resale, sometimes in a legitimate market. The fence thus acts as a middleman between thieves and the eventual buyers of stolen goods who may or may not be aware that the goods are stolen. As a verb, the word describes the...
(money) and one count of obstruction of justiceObstruction of justiceThe crime of obstruction of justice, in United States jurisdictions, refers to the crime of interfering with the work of police, investigators, regulatory agencies, prosecutors, or other officials...
.
Monus was found guilty on the government's second attempt to try him; the first trial ended in a hung jury. He was later charged with jury tampering
Jury tampering
Jury tampering is the crime of unduly attempting to influence the composition and/or decisions of a jury during the course of a trial.The means by which this crime could be perpetrated can include attempting to discredit potential jurors to ensure they will not be selected for duty. Once selected,...
in the first trial, but was acquitted.
He was sentenced to 19½ years in federal prison
Federal prison
Federal prisons are run by national governments in countries where subdivisions of the country also operate prisons.In the United States federal prisons are operated by the Federal Bureau of Prisons. In Canada the Correctional Service of Canada operates federal prisons. Prison sentences in these...
and served 10 years. The sentence was reduced after Monus cooperated with federal authorities (FBI) in a case against another Youngstown fraudster, Richard Goldberg.