The Securities and Exchange Commission filed civil fraud charges against Dutch grocer Royal Ahold and three of its former executives in connection with an accounting scandal involving the overstatement of hundreds of millions of dollars of earnings.

The SEC charged Ahold with fraudulently fabricating hundreds of millions of dollars of earnings and charged three former executives -- former chief executive and chairman Cees van der Hoeven, former chief financial officer and executive board member A. Michiel Meurs, and former executive vice president and executive board member Jan Andreae -- with fraudulently overstating sales by billions of dollars. The commission also charged Roland Fahlin, a former member of Ahold's supervisory board and audit committee, with causing violations of securities laws.

The complaints, filed Wednesday in District Court in the District of Columbia, allege that, as a result of the fraudulent inflation of promotional allowances at Columbia, Md.-based U.S. Foodservice, Ahold's wholly owned subsidiary, the improper consolidation of joint ventures through fraudulent side letters, and other accounting errors and irregularities, Ahold's original SEC filings for at least fiscal years 2000 through 2002 were materially false and misleading.

For fiscal years 2000 through 2002, the SEC said that Ahold overstated net sales by roughly $30 billion. For fiscal years 2000 and 2001 and the first three quarters of 2002, Ahold overstated operating income by about $3.3 billion and net income by approximately $829 million.

Ahold agreed without admitting or denying the allegations to settle the SEC's charges. The company agreed to be permanently barred from violating securities laws. The SEC said that it didn't seek a penalty from Ahold, in part because of the company's "extensive" cooperation with its investigation.

Van der Hoeven and Meurs agreed to settle the charges, without admitting or denying the allegations, by consenting to permanent injunctions against violations of securities laws and to judgments permanently barring them from serving as officers or directors of public companies. Fahlin consented, without admitting or denying the allegations, to a cease-and-desist order finding that he was a cause of Ahold's violations of certain provisions of the securities laws.

The SEC said that it didn't seek penalties in the enforcement actions against the executives at the request of the Dutch Public Prosecutor's Office, which is conducting a parallel criminal investigation in the Netherlands, because of potential double jeopardy issues under Dutch law.

Thomas C. Newkirk, associate director of the SEC's Division of Enforcement, called the case "an example of the clear corporate advantage to conducting a comprehensive internal investigation and fully cooperating with the SEC."

The commission said that it will litigate the case against Andreae. Its investigation is continuing.

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