Former AIPC execs settle with S.E.C.
June 24, 2009
by FoodBusinessNews.net Staff
KANSAS CITY — Horst W. Schroeder and Warren B. Schmidgall, former executives for American Italian Pasta Co., on June 22 settled fraud charges with the Securities and Exchange Commission (S.E.C.) to resolve misconduct related to historical accounting and financial reporting.
In its complaint, the S.E.C. accused Mr. Schroeder, former chairman of AIPC, of signing off on documents at the end of AIPC’s 2003 fiscal year that showed $3.4 million in revenue that was not valid and collectible. As part of his agreement with the S.E.C., Mr. Schroeder agreed to pay $50,000 in fines without admitting to or denying the allegations.
For his part, Mr. Schmidgall, former chief financial officer of AIPC, was accused of engaging in an accounting scheme that led to overstating of the company’s pre-tax earnings by $59 million between 2002 and 2004. Mr. Schmidgall agreed to pay more than $138,000 in fines. In addition, he pled guilty to one count of conspiracy to commit wire fraud.
In September, AIPC settled with the S.E.C. and Department of Justice, acknowledging the wrongdoing by certain former officers and employees and agreeing to pay a monetary penalty of $7.5 million. The company also said it would continue to cooperate with the D.O.J. in any further investigation.
In settling with the S.E.C., AIPC agreed to a consent injunction requiring future compliance with federal securities laws.