After a two-week trial, a federal jury in Indianapolis decided that Marsh committed fraud and must pay $2.2 million in damages, the Indianapolis Star reported.
Jurors reached the verdict around 11 p.m., after about six hours of deliberations.
The company, which has about 100 stores in Indiana and Ohio, alleged that Marsh abused his authority as CEO "to facilitate his covert use of its coffers as his own personal checkbook." Marsh said the lawsuit was an effort to tarnish his reputation.
In closing arguments earlier Friday, an attorney for the supermarket chain argued that Marsh should be ordered to repay at least $7 million to the company. The lawsuit alleged he wasted millions of dollars in company money during his last six years as CEO.
Marsh's attorney, Andrew McNeil, argued that the former executive didn't commit fraud. McNeil said the supermarket's board knew of Marsh's spending and that his actions didn't violate the company policies or his contract.
He acknowledged his client "is not perfect, he is not a saint, but he gave everything he had to Marsh Supermarkets." But McNeil argued that the company that bought Marsh Supermarkets in 2006, and dismissed Marsh as CEO, was trying to use "different rules that didn't exist at the time Don Marsh was there."
Company attorney David Herzog reminded the jury about how Marsh testified that he didn't believe he fell under the company's code of conduct as CEO. March had repeatedly cited "oversight" as a reason for spending company money on dozens of personal trips, expenses on mistresses and gifts for friends and family.
"Mr. Marsh cannot be honest with himself because the truth is too hard to swallow," Herzog told jurors.