Ex-CFO of US Foodservice pleads guilty
19 September 2006, AMSTERDAM — The former chief financial officer of U.S. Foodservice has pleaded guilty to conspiracy in a major accounting fraud which helped to bring Dutch retail giant Ahold to its knees in 2003.
19 September 2006
AMSTERDAM — The former chief financial officer of U.S. Foodservice has pleaded guilty to conspiracy in a major accounting fraud which helped to bring Dutch retail giant Ahold to its knees in 2003.
Reuters reported that Michael Resnick entered a guilty plea at the US District Court in Manhattan on 8 September to his role in the fraud. He was scheduled for trial in October and will be sentenced on 11 December. U.S. Foodservice is a subsidiary of Ahold.
Prosecutors allege that from about 2001 to the end of 2002, Resnick and others at the Maryland-based U.S. Foodservice manipulated entries in the company's books to help it meet quarterly earnings targets.
Revelations that it had overstated its profits by up to USD 850 million, coupled with irregularities at the Ahold HQ in the Netherlands, almost destroyed the Dutch retailer.
Since then new Ahold CEO Anders Moberg has concentrated on rebuilding the company's finances and reputation. This has resulted in some overseas operations being sold off.
His predecessor Cees van der Hoeven was among three former executives who received suspended sentences from a Dutch court in May. The presiding judge accepted that case had nothing to do with the fraud in America.
They were found guilty of charges stemming from misleading investors about whether Ahold owned controlling interests in joint ventures in Brazil, Argentina and Scandinavia.
Although the Ahold scandal as a whole has been described as 'Europe's Enron', Van der Hoeven and his co-defendants did not benefit personally from their wrongdoing.
[Copyright Expatica News 2006]
Subject: Dutch news