NEW YORK — The Securities and Exchange Commission yesterday said it has charged two former top executives at drug store chain Duane Reade with accounting fraud, alleging that they executed false-payment schemes that inflated the company’s profits. According to the complaint, filed in federal court here, former Duane Reade Chief Executive Officer Anthony Cuti designed two types of accounting transactions — “real estate concessions” and “credit and rebilling” — that raised the chain’s pre-tax income by $17.5 million between 2000 and 2004.
William J. Tennant, the company’s former chief financial officer, “primarily implemented” the schemes, the SEC said. The two are also accused of hiding the scheme from other management, and Cuti is accused of lying to the company’s auditors.
The SEC said it is seeking fines, repayment of ill-gotten gains, and a judgment barring the men from serving as officers of a public company.
An attorney for Cuti could not be reached for comment. Tennant’s attorney, John Kenney, a partner in New York law firm Hoguet Newman Regal & Kenney, said he had not yet seen the complaint and declined to comment.
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