The US Securities and Exchange Commission has filed civil charges against three former executives of a ConAgra Foods subsidiary for allegedly scheming to inflate earnings.

The defendants were James Charles Blue, former president and chief operating officer of ConAgra Agri Products, Randy Cook, former president of North America Operations of United Agri Products, and Victor Campbell, UAP's former controller.

The SEC alleged that Blue, Cook and Campbell participated in a fraudulent scheme to overstate UAP's operating results in 1999 and 2000, while benefiting from inflated bonuses.

The misconduct allegedly caused ConAgra to overstate pre-tax income for fiscal 1999 by US$46.7m, or 7.35%, and in fiscal 2000 by $48.5m, 7.85%, the SEC said.

Blue has agreed to settle the charges without admitting or denying the allegations in the complaint, according to the SEC. He agreed to pay a total of $622,087, which includes $336,362 in disgorgement, $175,725 of prejudgment interest, and a $110,000 civil penalty.

Campbell, who also neither admitted nor denied the SEC allegations, agreed to pay $198,074, which includes $96,893 in disgorgement, $51,181 of prejudgment interest, and a $50,000 civil penalty.

The commission is seeking a permanent injunction for Cook against future violations, an officer-and-director bar, and civil penalties, it said. The regulator also seeks to have Cook divest all unexercised stock options and disgorge all gains with interest.

The SEC added that the settlement terms are subject to court approval, and that the investigation of the matter would continue.