As part of its efforts to enforce the Perishable Agricultural Commodities Act (PACA) and ensure fair trading practices within the U.S. produce industry, the Department of Agriculture (USDA) has imposed sanctions on six produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the PACA. These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from USDA. By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
The following businesses and individuals are currently restricted from operating in the produce industry:
- Fresco First LLC, operating out of Temecula, Calif., for failing to pay a $15,367 award in favor of an Arizona seller. As of the issuance date of the reparation order, Yvette Aceves and Armando Cruz were listed as members of the business.
- Fuentes Farms LLC, operating out of McAllen, Texas, for failing to pay a $13,200 award in favor of a Texas seller. As of the issuance date of the reparation order, Gisela B. Munoz was listed as a member of the business.
- MFC Food Service LLC, doing business as Full Line Food Company, operating out of Houston, Texas, for failing to pay a $59,832 award in favor of a Texas seller. As of the issuance date of the reparation order, Mingfa Qu was listed as a member of the business.
- Nova Fresh Produce Inc., operating out of Freehold, N.J., for failing to pay a $14,680 award in favor of a Texas seller. As of the issuance date of the reparation order, Nekhamiyev Marat was listed as the officer, director and major stockholder of the business.
- PFI Express Inc., operating out of Valley Stream, N.Y., for failing to pay a $57,638 award in favor of a Florida seller. As of the issuance date of the reparation order, Romilda Silva was listed as the officer, director and major stockholder of the business.
- Herbguy Inc., doing business as Rockhedge Herb Farms, operating out of Pleasant Valley, N.Y., for failing to pay a $22,369 award in favor of a Florida seller. As of the issuance date of the reparation order, John Alva was listed as the officer, director and major stockholder of the business.
Additionally, the USDA has filed an administrative complaint against Mibo Fresh Foods LLC. The company, operating from Texas, allegedly failed to make payment promptly to 14 produce sellers in the amount of $1,861,502 from May 2018 through June 2019.
Mibo Fresh Foods LLC will have an opportunity to request a hearing. Should USDA find that the company committed repeated and flagrant violations, it would be barred from the produce industry as a licensee for three years, or two years with the posting of a USDA-approved surety bond. Furthermore, its principals could not be employed by or affiliated with any PACA licensee for two years, or one year with the posting of a USDA-approved surety bond.
PACA provides an administrative forum to handle disputes involving produce transactions; this may result in USDA’s issuance of a reparation order that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. USDA is required to suspend the license or impose sanctions on an unlicensed business that fails to pay PACA reparations awarded against it as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued. Those individuals, including sole proprietors, partners, members, managers, officers, directors or major stockholders, may not be employed by or affiliated with any PACA licensee without USDA approval.
The PACA Division, which is in the Fair Trade Practices Program in the Agricultural Marketing Service, regulates fair trading practices of produce businesses that are operating subject to PACA, including buyers, sellers, commission merchants, dealers and brokers within the fruit and vegetable industry.
In the past three years, USDA resolved approximately 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.
Click here for an overview of companies who previously violated PACA.