YOUNGSTOWN, Ohio -- Michael 'Mickey' Monus wanted to bring pride to his home town. Instead, he may have brought disgrace and disappointment.
Monus, the founder of the Phar-Mor Inc. discount drug store chain, and the chief financial officer were accused last week by the firm's board of directors of inflating the value of Phar-Mor's inventory by $340 million. The board, which fired Monos, also said the pair embezzled another $10 million.
Monus helped revitalize this dormant steel town's city center, locating the Phar-Mor headquarters at the heart of downtown. He formed the World Basketball League for players 6-foot-7 and under and brought a team, the Pride, to Youngstown.
But the struggling league, which had teams in such places as Erie, Pa., Dayton, Ohio, and Halifax, Nova Scotia, also went belly up just over a week ago.
No formal charges have been brought and few details about the improprieties have emerged. So far, its been mostly finger-pointing between Phar-Mor's remaining managers and its former outside accounting firm of Coopers & Lybrand.
The board fired the firm last week, saying it based many corporate decisions on Cooper's audits. Cooper says the alleged collusion and fraud 'did not occur in a vacuum.'
Those who knew Monus find the whole situation hard to believe.
'We have our share of thieves in this valley,' said Youngstown Mayor Patrick Ungaro, who knew Monus as a child. 'But never in a million years would I have guessed that these charges would have been brought against Mickey.'
Monus, a huge sports fan, also owned a piece of the Colorado Rockies, one of two expansion baseball teams that will begin play next season in the National League. Last week, he agreed to sell his share.
He also brought a Ladies Professional Golf Association tournament to his Squaw Creek Country Club near Youngstown.
John Geletka, a suburban Canfield, Ohio, dentist who had served as commissioner of the WBL since February, said he considered Monus 'a credible person.'
'He ran this league on fumes this year with essentially nothing at all,' said Geletka. 'Monus, until this year, always honored his commitments.'
Milton Kantor, owner of the WBL Dayton franchise and a grocery wholesaler, said he dealt for years with the Monus family grocery chain and found them to be honest people.
'I just assumed it rubbed off on the kid,' said Kantor, who claims he's owed $260,000 by the league. 'Quite frankly, I don't think it did. '
The sketchy allegations suggest that Monus and former chief financial officer Patrick Finn overstated the value of the company's inventory, prompting investors to pump hundreds of millions of dollars into the company.
The company also has accused Monus and Finn of diverting $10 million in corporate funds to help the struggling WBL, which they both ran. Several other team owners also say they are owed money.
The end came swiftly, with Phar-Mor chief executive David Shapiro leading the purge of Manus and Finn and writing off the $350 million.
Phar-Mor has laid off more than 100 people in Youngstown and is expected to shut several stores to save money.
