Cuti and Tennant of Duane Reade, a chain of drugstores, were charged with securities fraud, making false entries in books and records and making
false statements to the Securities and Exchange Commission and auditors. If found guilty both are looking at up to 20 years of jail time. The charges stem from the two allegedly overstating the companies pretax income by $17.4M between 2000 and 2004 in order to meet company and analyst earning estimates.
“We vigorously deny the government’s allegations against Mr. Cuti and
remain confident of our position on the merits,” said a statement from Mr. Cuti's lawyers.
The full NYtimes article can be read here.