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COLUMBIA, Md. -- The U.S. Securities and Exchange Commission said this week it had charged 13 vendor employees and agents with aiding and abetting a financial fraud at Ahold unit U.S. Foodservice, Inc. here, according to published reports.
According to the SEC, U.S. Foodservice overstated its promotional allowances by at least $700 million during fiscal years 2001 and 2002.
The charged individuals allegedly helped the fraud along by signing and returning falsified audit confirmations sent to them by U.S. Foodservice auditors.
Carl Allen, Gary Bell, Donald Childers, John Crowder, Joseph Grendys, Anthony Holohan, Chris Jakubek, John King, Steve LeBarron, Patrick Penderghast, Frank Riggio, Michael Smith, and Richard Vecchia, all of whom are employees of or agents for vendors that supplied U.S. Foodservice, were charged.
Allen, Childers, Crowder, Jakubek, King, LeBarron, Penderghast, Riggio, and Vecchia consented to pay a $25,000 penalty without admitting or denying the charges. Attorneys for Bell and Holohan maintained their respective clients' innocence. An attorney for Allen said that his client neither admitted nor denied the charges, but added that Allen had alerted outside auditors to the situation at U.S. Foodservice.
The SEC said it plans to litigate a contested action against the people who haven't settle the charges.