Three former executives of Royal Ahold NV’s U.S. unit have been charged with fraud conspiracy for exaggerating earnings by more than $800 million, Bloomberg reported.

Michael Resnick, 42, former chief financial officer of the unit; Mark Kaiser, 47, ex-marketing manager; and William Carter, 43, a former vice president, were charged with a fraud conspiracy, Interim U.S. Attorney David Kelley said Tuesday.

"It was a cooking of the books fueled by the greed of the defendants," Kelley said at a press conference in Manhattan. "We’re taking a very broad look both up the ladder and down the ladder'' at the company.

Timothy Lee, 40, a former purchasing executive who has pleaded guilty to insider trading, is cooperating with prosecutors, as is Carter, Kelley said. Carter pleaded guilty to fraud yesterday. Lee pleaded on Friday.

Resnick and Kaiser are expected to enter a plea in federal court to charges including securities fraud, conspiracy to commit securities fraud and filing false statements to the U.S. Securities and Exchange Commission (SEC).

The charges culminate a yearlong investigation of how U.S. Foodservice handled the promotional fees food makers paid to the Ahold unit for prime shelf space.

The three-count indictment alleges that U.S. Foodservice inflated earnings by recording promotional allowances that hadn’t been earned as personal income. The maneuver allowed Kaiser and Resnick to double their salary in bonuses, Kelley said.

Kelley said the alleged fraud, which took place between 2000 and February 2003, involved having vendors write letters to verify the legitimacy of the promotional allowances. Secret letters on the side excused the originals.

Manufacturers give retailers rebates in exchange for sales on their brands or shelf space that sells more products. In 2000, Ahold bought U.S. Foodservice, which was involved in more than 125 contracts for promotional allowances by the end of 2002. Ahold owns Giant, Stop & Shop and other supermarket chains.

"They manipulated income, they accelerated income, and in some instances they just made it up," said Linda Thomsen, deputy enforcement director of the Securities and Exchange Commission.

Ahold acknowledged last year that it overstated profit by $1.2 billion over three years, because of fraud at U.S. Foodservice in particular. Ahold's restatement of its finances cost investors $6 billion, as shares fell roughly 60 percent.

Also yesterday, the SEC filed a civil suit against Resnick, Kaiser, Carter and Lee, alleging that they had committed accounting fraud. The SEC also sued Lee and another man, Ahold fish supplier Peter Marion, 53, for insider trading stemming from Lee's tip about Ahold's 2000 takeover of U.S. Foodservice. Marion, who was also charged criminally, allegedly earned $364,800 by buying U.S. Foodservice stock.