Over the weekend a judge in Milan formally charged 15 Parmalat executives and three financial institutions in connection with the billion-dollar fraud that was perpetrated at the food industry behemoth. Along with the company executives the Italian offices of Bank of America, Deloitte and Touche, and Grant Thornton were indicted for misleading investors and just generally being unable to provide a credible explanation for the multi-billion dollar hole that was uncovered in Parmalat's books.

The charges have been brewing since late 2003 when Parmalat declared bankruptcy. This week jail sentences were finally meted out to eleven of the executives charged in the corporate scandal that has come to be called Europe's Enron. Based on a plea agreement with prosecutors, the eleven executives accepted sentences ranging from one year to thirty months in jail in exchange for acknowledging their wrongdoing.

While the maximum term in Italy for market manipulation is five years, the abbreviated terms of service described in the plea agreement mean that few if any of the executives party to the agreement will ultimately serve any time behind bars. Nine of the eleven executives have already had their sentences suspended and the other two have the option of petitioning to have their terms commuted to community service.

And while some of the guests appear to be leaving the party, the festivities aren't over quite yet. According to Milan Prosecutor Francesco Greco, "We have managed to complete the first phase of our investigation within an acceptable timeframe, considering the large number of defendants involved...Now we are close to filing our indictment requests for the second phase of the investigation, which targets the banks.'' Prosecutors are also conducting a separate probe on other charges including fraudulent bankruptcy, but have yet to ask for indictments.

-- MDT

Labels: Enron, Grant Thornton, Parmalat