Sep 29, 2006 8:04 AM, from staff and wire reports

Netherlands-based Royal Ahold will not face prosecution in an $800 million accounting fraud scandal at its US Foodservice subsidiary.

Federal prosecutors and Ahold reached this agreement because the food retailer supplied full cooperation in the investigation and provided a $1.1 billion settlement to investors. As part of the agreement, Ahold must continue to cooperate with prosecutors in the United States government’s investigation and in a related civil lawsuit by the US Securities and Exchange Commission.

Ex-US Foodservice chief financial officer Michael Resnick pleaded guilty September 18 to a conspiracy charge in the scandal. He faces sentencing December 11. Mark Kaiser, the subsidiary's former marketing director, has pleaded not guilty, and his trial is set for October 10.

Sixteen vendors are facing criminal charges in the fraud that saw Columbia MD-based US Foodservice and Ahold overstate earnings from 2000 to 2003.