Joseph Grendys et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21435 / March 4, 2010

Accounting and Auditing Enforcement Release No. 3118 / March 4, 2010

Securities and Exchange Commission v. Joseph Grendys et al., Civil Action No. 07-120 (D.D.C.)

SEC ANNOUNCES SETTLEMENT WITH INDIVIDUAL CHARGED WITH AIDING AND ABETTING FINANCIAL FRAUD AT U.S. FOODSERVICE

The Securities and Exchange Commission announced today that the U.S. District Court for the District of Columbia, on March 3, 2010, entered a settled Modified Final Judgment as to defendant Anthony Holohan.  In this previously filed Commission injunctive action against Holohan and three other individuals, the alleged misconduct arose from a financial fraud at U.S. Foodservice, Inc.  Securities and Exchange Commission v. Joseph Grendys et al., Civil Action No. 07-120 (D.D.C. filed Jan. 18, 2007 ).  Holohan is a former employee of a vendor that supplied U.S. Foodservice.

The Commission's complaint alleges that Holohan aided and abetted the financial fraud by signing and returning materially false audit confirmations.  The Commission's complaint further alleges that U.S. Foodservice personnel contacted Holohan and urged him to sign and return the false confirmation letters to the auditors for U.S. Foodservice.  At the time, U.S. Foodservice was a subsidiary of Royal Ahold (Koninklijke Ahold N.V.).  The letters clearly stated that the confirmations were being used in connection with the annual audit of the financial statements of U.S. Foodservice, and the letters directed Holohan to return them directly to U.S. Foodservice's independent auditors.  

Without admitting or denying the allegations in the Commission's complaint, Holohan agreed to settle the action against him by consenting to a Final Judgment permanently enjoining him from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5 and 13b2-1 thereunder and imposing a $25,000 civil penalty.  Two other defendants settled previously.  

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 No. 19975 (Jan. 22, 2007).