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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22192 / December 13, 2011

Accounting and Auditing Enforcement Release No. 3343 / December 13, 2011

Securities and Exchange Commission v. Michael Resnick et al., Civil Action No. 1:05-cv-01254-CCB (D. Md.)

SEC ANNOUNCES FINANCIAL FRAUD SETTLEMENT WITH FORMER U.S. FOODSERVICE EXECUTIVE MARK KAISER

The U.S. Securities and Exchange Commission (Commission) announced today that on December 12, 2011, the U.S. District Court for the District of Maryland entered a final judgment against defendant Mark P. Kaiser in a Commission injunctive action, Securities and Exchange Commission v. Michael Resnick et al., Civil Action No. 1:05-cv-01254-CCB (D. Md.). Kaiser is the former Executive Vice President of Purchasing and Chief Marketing Officer of U.S. Foodservice, Inc. (USF). The Commission’s original complaint was filed on July 27, 2004 in the U.S. District Court for the Southern District of New York. The Commission’s second amended complaint was filed on February 16, 2005, and alleges that Kaiser and three other USF executives engaged in a scheme to overstate the operating income of USF, and therefore of its then-parent corporation, Royal Ahold (Koninklijke Ahold N.V.) (Ahold), by more than $700 million for Ahold’s fiscal years 2001 and 2002. The Commission also alleged that the executives induced numerous suppliers to submit false confirmations to the company's auditors in order to conceal their fraud. Kaiser’s three co-defendants settled previously.

Without admitting or denying the allegations in the second amended complaint, Kaiser consented to the entry of the final judgment permanently enjoining him from violations of Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 10b-5 and 13b2-1 and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-1; prohibiting him from acting as an officer or director of a public company; and ordering him to pay $352,329 in disgorgement, but deeming payment satisfied by entry of a forfeiture order in the parallel federal criminal proceeding.

In that parallel proceeding, United States v. Mark P. Kaiser, (S1) 04 Cr. 733 (SDNY) (TPG), Kaiser was sentenced on December 7, 2011, in the U.S. District Court for the Southern District of New York to a term of incarceration of forty-six months and ordered to forfeit the amount of $352,329.

The Commission acknowledges the assistance and cooperation of the Office of the United States Attorney for the Southern District of New York and the New York Office of the Federal Bureau of Investigation.

For further information, see Litigation Release Nos. 20592 (May 21, 2008), 19031 (January 11, 2005), and 18797 (July 27, 2004).

 

 

http://www.sec.gov/litigation/litreleases/2011/lr22192.htm


Modified: 12/13/2011