WASHINGTON — The Securities and Exchange Commission filed enforcement actions late last month against 13 people, alleging they played a role in a massive financial fraud at U.S. Foodservice, the division of Ahold that admitted in 2003 to overstating its profits by at least $700 million in the preceding two years.
The individuals, who worked for U.S. Foodservice suppliers or their agents, were accused of signing false audit confirmations sent to them by the auditors of U.S. Foodservice. In some cases, the SEC said, the vendors were pressured into cooperating; in other cases, U.S. Foodservice provided side letters assuring the vendors they did not owe the full amount listed in the audit confirmations.
The SEC said the audit confirmations often inflated the amounts owed by each of the vendors “by millions of dollars and by more than 100%.”
Carl Allen, Donald Childers, John Crowder, Chris Jakubek, John King, Steve LeBarron, Patrick Penderghast, Frank Riggio and Richard Vecchia settled without admitting or denying guilt and agreed to pay a $25,000 fine each. The SEC said it will litigate against the other four: Gary Bell, Joseph Grendys, Anthony Holohan and Michael Smith.
Including these most recent actions, the SEC has now filed actions against 30 people in the case.