Monday, January 12, 2009

Missouri Former Pasta CEO Pleads Guilty To Cooking The Books

Timothy S. Webster, 46, of Mission Hills, Kansas and the former CEO of American Italian Pasta Company of Kansas City, Missouri, pleaded guilty to one count of wire fraud in connection with the misrepresentation of the financial health of the company. Warren B. Schmidgall, 58, of Topeka, Kansas and the former CFO of the company also plead guilty to wire fraud. The SEC had charged that Webster (pictured left) and Schmidgall misrepresenting the company’s financial performance between May 2002 and December 2004, violating the anti-fraud provisions of the Sarbannes-Oxley Act. Prosecutors alleged that the company's revenues were overstated by some $36 million during this period. Webster served as CEO from 1992 until 2005 when he resigned. Webster and Schmidgall each face up to five years in prison and $250,000 in fines, plus restitution. Three other American Italian Pasta execs faced criminal charges related to the overstatement of financials, including: David E. Watson, 53, of Kansas City, Missouri and the former executive vice president of corporate development and strategy; Stephanie S. Ruskey, 43, of Odessa, Missouri and the former controller; and Mark Peterson, former vice president of accounting and finance.

Read the story here and here.

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