Michael I. Monus

Monus partnered with David Shapira, to launch Phar-Mor, a "deep discount" drugstore which used a strategy of aggressive buying to provide customers with tremendous savings, if fewer selections.[3] With startup money provided by Giant Eagle, Inc., the supermarket company in which Shapira's family members were large shareholders, the Phar-Mor discount drug chain became enormously successful.[3] In 1988, the chain featured 100 stores, and Monus was described in the media as one of the nation's leading entrepreneurs.[3] 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.[3] A notoriously tough negotiator, he was able to keep retail prices low; and by 1991, there were 200 Phar-Mor outlets across the country.[3] 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.[8] 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.[1]

Amid this success, however, Monus began to show signs of becoming overextended. PharMor stores expanded into new lines, including sportswear. Meanwhile, Monus' decision to sponsor the World Basketball League placed severe financial pressure on the corporation.[3] It was speculated that Mickey Monus' father Nathan was somehow able to escape an indictment despite seemingly significant involvement in the massive fraud.[9]

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.[3] It would be considered one of the largest frauds in US history.[10]

Court documents also indicated that Monus had embezzled about $10 million from the company, mainly to support his beleaguered World Basketball League[3] and extravagant lifestyle.[10] Monus' business partner David Shapira contacted federal agents, notified investors, and fired Monus, along with Phar-Mor's chief financial officer Patrick Finn.[3][11] Unsecured claims against Monus totaled $4,104,121, while secured claims were calculated at $15,257,545.[12]

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.[3]

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.[1]

Monus was also a major benefactor to Youngstown State University, serving as chairman of its board of trustees. It emerged that Ray Issac, the quarterback for the 1991 Youngstown State Penguins football team (which won the NCAA Division I-AA National Championship that year), 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 the university. The true scope of the violations was only revealed in 1998, when Isaac admitted tampering with a juror in Monus' fraud trial. The university admitted to a lack of institutional control, and docked itself some scholarships; however, it was allowed to keep the 1991 national championship, because the statute of limitations had run out.[8]