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COLUMBIA, Md. and SCARBOROUGH, Maine -- Ex-employees of Ahold division U.S. Foodservice and Hannaford Bros. were in court this week in connection with separate frauds committed at the companies.
According to published reports Susan Brown, U.S. Foodservice's onetime controller, agreed to pay a $100,000 civil penalty to settle allegations that she took part in a scheme to overstate profits by $700 million in fiscal years 2001 and 2002, the SEC said. Brown additionally consented to a five-year ban on serving as an officer of a public company, but neither admitted nor denied wrongdoing.
Brown's boss at U.S. Foodservice, former c.f.o. Michael J. Resnick, was sentenced last month to six months' and three years' probation in a separate criminal case. He entered a guilty plea to one count of conspiracy last September.
In other legal news, Hannaford Bros.' former v.p. for government relations, Martin T. Greeley, a 26-year veteran of the company, received a 46-month sentence in U.S. District Court in Portland, Maine, after pleading guilty last August to mail fraud and tax evasion. He must also pay $657,260 in restitution and serve three years of supervised release after completing his sentence.
Greeley's scheme involved creating fake vendors and authorizing payments from Hannaford to them for nonexistent services. Hannaford issued checks to the fake vendors, which Greeley deposited into accounts he opened for the purpose. The retailer alerted the authorities to Greeley's activities and helped in the ensuing investigation, said U.S. Attorney Paula Silsby.