Police Detain Seven More People as Parmalat Investigation Widens
The scandal surrounding the Italian food conglomerate Parmalat widened Wednesday as seven more company officials and auditors were detained and a judge released a document indicating that an executive of the dairy giant had ordered that a computer used to falsify records be smashed with a hammer.
Prosecutors also began investigating whether officials from Bank of America Corp. may have been involved in the scandal, according to several news reports, citing Parma prosecutors. The agencies said three Bank of America lawyers were in Parma awaiting a meeting with prosecutors.
There was no confirmation from prosecutors.
“We continue to fully cooperate with all authorities,” said Bank of America spokeswoman Betsy Weinberger in Charlotte, N.C.
Also Wednesday, Parmalat said it had hired a consultant to find a buyer for its bakery business in North America. The Chicago-based unit is the third-largest cookie producer in the U.S., turning out brands such as Archway and Mother’s. The sale of Archway could be worth about $400 million.
Meanwhile, an official from the U.S. Securities and Exchange Commission met with prosecutors in Milan and agreed to try to work together in the investigation. The SEC has sued Parmalat for “grossly overstating its assets” to U.S. investors, who hold about $1.5 billion in its bonds and notes.
The developments in the billion-dollar fraud scandal that put the company in bankruptcy protection came as a judge overseeing the case, Guido Salvini, issued a document that detailed new admissions by Parmalat executives and employees implicated in the scandal.
“Four times a year, the system of putting together false documents was activated on the occasion of the four balance sheet operations that the company had,” the document quotes Parmalat’s ex-chief financial officer, Fausto Tonna, as telling prosecutors. He is among those detained.
The document quotes another official who was detained in the sweep, former financial executive Luciano Del Soldato, as saying he directed that documents be forged on a computer that had a phony Bank of America logo stored on its hard drive.
“I should specify that recently we destroyed the computer’s memory,” Del Soldato said.
Parmalat employee Gianfranco Bocchi, who also was detained, said Del Soldato had instructed a colleague to destroy the computer with a hammer.
Parmalat has acknowledged a multibillion-dollar hole in its balance sheet.
The company’s jailed founder, Calisto Tanzi, has put the size of the hole in its finances at $10 billion, and has admitted that he shifted $620 million from Parmalat’s coffers to loss-making travel businesses controlled by his family, Salvini’s document said.
Besides Tonna, Del Soldato and Bocchi, the other detainees are Parmalat employee Claudio Pessina; Grant Thornton auditors Lorenzo Penca, the president of the company’s Italy office, and partner Maurizio Bianchi; and outside legal counsel Gianpaolo Zini.
Police issued an arrest warrant for an eighth person, Giovanni Bonici, who was in Venezuela but was expected back in Italy soon.
The warrants were issued by Parma prosecutors who suspect the men of criminal association leading to fraudulent bankruptcy and false accounting, among other charges.
The accusations are similar to those leveled against Tanzi, who has been in a Milan prison since Saturday.
