Former Duane Reade execs convicted of fraud

Two former chief officers of Duane Reade have been convicted of fraud after a two-month long trial, in which one of the city’s biggest retail brokerage firms, Winick Realty Group, played a central role, according to the United States Attorney of the Southern District of New York. Former CEO Anthony Cuti and one-time CFO William Tennant were both convicted of conspiracy and securities fraud, in connection with a five-year-long scheme to falsely increase income and lower expenses, while misleading investors. Tennant got a $2.8 million stock gain in 2001 after working on fraudulent real estate transactions, Bloomberg news said.

The case involved several fraudulent real estate deals, through which the two men made millions, prosecutors said. Two of the city’s leading retail brokers, Cory Zelnik, former president of Winick Realty, and Jeff Winick, CEO of the firm, had been involved in a handful of those deals, acting as landlord and broker, although neither was charged in the case.

As The Real Deal reported in April, prosecutors identified WInick as an unindicted co-conspirator, while Zelnik cut an immunity deal with prosecutors in exchange for his testimony, in order to avoid prosecution. Late last month, the state Department of State announced that it was opening an investigation into both brokers, related to a questionable $100,000 commission they received.

Cuti’s sentencing is set for Nov. 15, while Tennant’s is slated for Dec. 6.