SYRACUSE — Federal regulators charged an upstate New York-based regional grocery chain with fraud, claiming Tuesday a multimillion dollar accounting scheme made the company’s finances look better than they were.

In a complaint filed in U.S. District Court, the U.S. Securities and Exchange Commission said The Penn Traffic Co. inflated operating income by approximately $10 million over a nearly three-year period and overstated its after-tax net income by about $7 million.

SEC officials also said the company failed to file certain required financial reports or filed reports that did not fully comply with SEC regulations.

“Penn Traffic improperly recorded revenue that distorted its true financial condition. Obviously, whenever the public relies on false financial information they are going to be deceived,” said David Rosenfeld, associate director of the SEC’s New York Regional Office.

Without admitting or denying the allegations, Penn Traffic agreed to settle the charges by consenting to a permanent injunction against any future violations of federal securities laws. The SEC imposed no fines or monetary penalties on Penn Traffic, Rosenfeld said.

Additionally, Penn Traffic agreed to hire an independent examiner who will provide annual reports to the SEC, the U.S. Attorney and the company’s board of directors. It has also reformed its internal controls and policies to prevent future violations.

“The company has worked hard to address a number of legacy issues so Penn Traffic’s resources and attention can be fully dedicated to our customers,” said Daniel Mahoney, the company’s senior vice president and general counsel. “The settlement is another important step in the right direction.”

Penn Traffic operates or supplies more than 210 supermarkets in New York, Pennsylvania, Vermont and New Hampshire. Its stores do business under the P&C, Quality and BiLo names.

The company has struggled financially for the past decade. It emerged from a nearly two-year bankruptcy court reorganization in April 2005 with new management but has continued to lose money. It also went through bankruptcy reorganization in 1999.

Last month, Penn Traffic reported that it had lost nearly $16 million through the first half of its current fiscal year.

According to the SEC’s 25-page complaint, Penn Traffic intentionally inflated its operating income and other financial results by prematurely recognizing promotional allowances in a scheme that lasted from approximately the second quarter 2001 through at least the fourth quarter 2003.

Promotional allowances — also referred to as rebates, slotting fees, or vendor allowances — are paid by vendors to retailers in exchange for various marketing and promotional activities, such as in-store product displays or cooperative advertising.

The SEC’s complaint also alleged a separate scheme from 2000 to 2003 involving the Penny Curtiss bakery, a wholly-owned subsidiary that Penn Traffic closed earlier this year. The SEC said Penny Curtiss fabricated accounting records to overstate inventory and reduce the cost of goods sold.

The SEC previously charged two former senior Penn Traffic executives and one Penny Curtiss executive for their roles in the fraudulent schemes.

The cases are still pending against Leslie Knox, Penn Traffic’s former senior vice president and chief marketing officer, and Linda Jones, Penn Traffic’s former vice president of non-perishable merchandising. Jones, of Reynoldsville, Pa., and Knox, of Titusville, Fla., were charged with conspiracy to commit securities and mail fraud and making false filings. If convicted, each faces a sentence of up to 20 years and fines totaling $5 million.

Former Penny Curtiss operations director Michael Lawler pleaded guilty to wire fraud charges in 2005.

Penn Traffic remains under investigation by the U.S. Attorney’s office.