Quick Stats

Quick Stats

    You are here

    Ahold Won't Be Prosecuted in U.S.

    AMSTERDAM -- Federal prosecutors in New York said late last week that retail conglomerate Royal Ahold here won't be charged in a multimillion-dollar earnings-overstatement case involving the company's Columbia, Md.-based U.S. Foodservice division.

    AMSTERDAM -- Federal prosecutors in New York said late last week that retail conglomerate Royal Ahold here won't be charged in a multimillion-dollar earnings-overstatement case involving the company's Columbia, Md.-based U.S. Foodservice division.

    Michael Garcia, the U.S. Attorney for the Southern District of New York, reached nonprosecution deal with Ahold, which Garcia noted has cooperated fully with a governmental probe and agreed to a $1.1 billion settlement with shareholders.
    (Story continues below.)

    The agreement stipulates that the company must continue to comply with the investigation or be prosecuted for fraud and for a related civil lawsuit brought by the SEC.

    In July 2004 a grand jury in Manhattan charged two U.S. FoodService executives with conspiracy and securities fraud for their alleged manipulation of the company's books to inflate earnings.

    Last month one of two U.S. Foodservice executives charged with conspiracy and securities fraud by a grand jury, former c.f.o. Michael Resnick, pleaded guilty to a conspiracy charge and will be sentenced in December. The other man, onetime marketing director Mark Kaiser, pleaded not guilty and is set to go on trial Oct. 10. Sixteen vendors have also been charged in the case. In May the former chief executive and c.f.o. of Royal Ahold received suspended jail terms from a court in the Netherlands for their part in the fraud.

    The government estimates that U.S. Foodservice and Ahold overstated earnings by about $800 million from 2000 to 2003.

    Related Content

    Related Content