SK Foods

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SK Foods was a major tomato processor

SK Foods was a California-based agribusiness company, with two packing and processing plants in Williams, California and Lemoore, California, respectively.[1] It was a major tomato processor.[2] SK Foods, Ingomar Packing Co. and Los Gatos Tomato products formed the California Tomato Export Group, (CTEG),[3] which collectively produced over half of the U.S. supply of tomato products at the time of the group's formation in 2005.[2] The company's Williams plant has employed hundreds of people each summer to can and process tomatoes during harvest season.[1]

Controversy[edit]

Former owner Frederick Scott Salyer was arrested on racketeering and corruption charges in early 2010 stemming from a five-year investigation of practices in the processed-tomato arm of his company SK Foods by the United States Department of Justice. The investigation was prompted by an SK Foods executive who admitted a $1 million embezzlement from another company and turned into a key informant against Salyer.[4][5][6] Investigators alleged that the company bribed buyers such as Frito-Lay, Kraft Foods and Safeway to accept moldy rotting tomatoes, to pay above-market prices, and to provide SK with information on competitors' activities. Court documents filed by the lawfirm of Keker and Vannest state Salyer and SK Foods never paid any bribes.[5][7] As lower-level company officials cut deals with prosecutors, SK Foods lenders forced an involuntary Chapter 11 bankruptcy instant action in May of 2009.[8][4][9] It was acquired out of bankruptcy in June 2009 by Olam International, based in Singapore.[1] It is now known as Olam Tomato Processors. An associated produce company, Salyer American Fresh Foods, was forced to close after its lenders stopped providing the company with money.[10]

On March 23, 2012, Salyer signed a Plea Agreement supplied by the United States Department of Justice admitting to one count price-fixing in the Antitrust case and one count racketeering in the RICO 1964 case, counts 1 and 8.[11][12][13] If convicted, one RICO count alone would carry a 30 year mandatory minimum sentence according to the United States Federal Sentencing Guidelines.[14] Before ordering Scott Salyer to spend six years in prison, a federal judge on Tuesday appeared perplexed how the former millionaire agribusiness owner ended up in the jam he confronted in a 15th-floor courtroom.[15][4]

U.S. District Court Judge Lawrence K. Karlton questioned why the 57-year-old threw away a Monterey-based farming empire that stretched from the San Joaquin Valley to New Zealand. "Here's a millionaire who risked everything for nothing,” the judge said. "I don't understand it.”[4]

References[edit]

  1. ^ a b c "SK Foods' sale good news for tomato growers.". Marysville Appeal-Democrat. June 27, 2009. 
  2. ^ a b New charges filed against California tomato mogul, Los Angeles Times, April 30, 2010.
  3. ^ "US Dept of Commerce CTEG Export Trade Certificate of Review". OperationRottenTomato.com. February 21, 2006. Retrieved January 30, 2014. 
  4. ^ a b c d "Judge asks why one-time millionaire risked ag empire". The Herald. February 12, 2013. Retrieved February 23, 2014. 
  5. ^ a b "'Operation Rotten Tomato' Case Speak Out Against Injustice After Sentencing". Yahoo Finance. February 19, 2013. Retrieved February 23, 2014. 
  6. ^ "Defendant F. Scott Salyer's Opposition to Morning Star Motion To Quash Subpoenas Case No. 2:10-CR-0061-LKK(GGH)". OperationRottenTomato.com. February 18, 2010. Retrieved February 23, 2014. 
  7. ^ "Tomato king Scott Salyer a man of his past". Monterey County Herald. 
  8. ^ Withers, Dawn (8 May 2009). "SK Foods lenders force bankruptcy". The Packer. 
  9. ^ Bribes Let Tomato Vendor Sell Tainted Food, The New York Times, February 24, 2010.
  10. ^ Withers, Dawn (20 May 2009). "Salyer American Fresh Foods closing". The Packer. Retrieved February 23, 2014. 
  11. ^ "The Case Docket #: 2:10-cr-00061 LKK Exhibit A Plea Agreement". Supporters of Scott Salyer. March 23, 2012. Retrieved February 23, 2014. 
  12. ^ "Founder of Central Valley tomato firm guilty in price-fixing case". Los Angeles Times. March 23, 2012. Retrieved May 30, 2012. 
  13. ^ "SK Foods founder pleads guilty in fraud case". Reuters. Mar 23, 2012. Retrieved May 30, 2012. 
  14. ^ "Federal Sentencing Guidelines". United States Government Sentencing Commission. March 23, 2012. Retrieved February 23, 2014. 
  15. ^ "Lawrence Karlton". Judgepedia. December 23, 2013. Retrieved February 23, 2014. 

Further reading[edit]

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