The Baltimore Sun
U.S. Foodservice Fraud Nears $1B

By Lorraine Mirabella

Fraudulent accounting of rebates from suppliers at its Columbia-based subsidiary will cost global food retailer Royal Ahold NV nearly $1 billion, according to figures released yesterday.

Ahold said that U.S. Foodservice overstated profit by $880 million over three years, 76 percent more than the previously estimated $500 million.

The original report of the fraud sent Ahold shares plummeting by nearly two-thirds. "If they have put everything into this, if it truly is comprehensive, they have a chance of starting fresh and hopefully will build up from here," said Edward Ketz, associate professor of accounting at Penn State University. "The only concern is whether it truly is everything or whether we'll have new surprises coming up later. If they have only revealed a little bit, it could be bad news in the long run."

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Penn State's Smeal College of Business offers highly ranked undergraduate, MBA, executive MBA, Ph.D., and executive education opportunities to more than 5,500 students at all levels. Featuring academic departments of accounting, finance, marketing, insurance and real estate, management, and supply chain and information systems, the college is also home to major research centers such as the Center for Supply Chain Research, the Institute for the Study of Business Markets, the eBusiness Research Center, the Farrell Center for Corporate Innovation and Entrepreneurship, the Center for Global Business Studies, and the Center for the Management of Technological and Organizational Change.

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