U.S. attorney for the Southern District of New York, Michael Garcia, said in a Sept. 25 letter to company lawyers released yesterday that Ahold and the second largest U.S. distributorship located in Columbia, MD, agreed to cooperate with federal investigations of the company and its employees. In light of a $1.1 billion settlement with plaintiffs in a shareholder suit, the government is not asking for additional restitution, the Garcia said.
The agreement was reached three weeks after Michael J. Resnick, former cfo of U.S. Foodservice, pleaded guilty to conspiracy in what prosecutors had determined was an $800 million fraud. Resnick will be sentenced on Dec. 11. His co-defendant, Mark P. Kaiser, a former marketing executive of the distributorship, is set to be tried in New York in October.
Prosecutors said Resnick helped U.S. Foodservice exaggerate earnings by about $800 million in 2000-03, using false promotional allowance documents or sheltered income provided by vendors.
Ahold, based in Zaandam, The Netherlands, admitted in 2003 that it overstated profit by $1.28 billion, mostly related to fraud involving promotional allowances at U.S. Foodservice. Criminal charges have also been brought against 16 vendors for their role in the fraud.