The former controller of U.S. Foodservice (USF), a subsidiary of Dutch food conglomerate Royal Ahold, has agreed to pay $100,000 to settle fraud charges with the Securities and Exchange Commission.
Suzanne Brown, who neither admitted nor denied the SEC’s allegations, also agreed to a five-year bar from serving as an officer or director of a public company and to not appear or practice before the commission as an accountant for at least five years.
The SEC accused Brown of participating in “a large-scale fraud” that enabled Ahold to overstate income by about $700 million for fiscal years 2001 and 2002.
The commission alleged that, at the instruction of USF executives who supervised her, Brown made false entries in the company’s books and records, or directed others to do so. “These entries did not reflect the company’s actual operating performance,” the SEC elaborated; “instead, they were determined solely by what USF required to make its budgeted earnings.”
According to the complaint, Brown made or directed others to make entries in USF’s books and records that she knew, or was reckless in not knowing, did not comply with generally accepted accounting principles. These entries included releases of reserves and accruals to make up for earnings shortfalls, according to the commission.
The SEC also alleged that Brown provided Ahold’s independent auditors with false or misleading information related to their audit of USF’s financial statements.