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 three 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:
- Morita Produce, operating out of Los Angeles, Calif., for failing to pay a $13,560 award in favor of a Washington seller. As of the issuance date of the reparation order, Gerry Morita and Patricia Nakahara were listed as the officers, directors and/or major stockholders of the business.
- Latinotrading LLC, operating out of Miami, Fla., for failing to pay a $4,770 award in favor of a Texas seller. As of the issuance date of the reparation order, Yudenia Fernandez Montes De Oca and Sergio Feliberto Paz Santos were listed as a members or managers of the business.
- LS & CX LLC, operating out of Plano, Texas, for failing to pay a $73,586 award in favor of a California seller. As of the issuance date of the reparation order, Xuan Chen, Sheng Lin and Xin Lin were listed as a members or managers of the business.
The U.S. Department of Agriculture (USDA) has determined that Michael S. Rawlings, Drew Johnson and Jonathan Dyer were not responsibly connected members of Adams Produce Company LLC (Adams), Birmingham, Ala. This is an update to Press Release No: 114-14 issued on April 24, 2014.
Adams failed to pay $10,735,186 to 51 sellers for 9,314 lots of produce. This is in violation of the Perishable Agricultural Commodities Act (PACA). Subsequently, the USDA imposed sanctions on individuals deemed to be responsibly connected to the business and required that all principals not be employed by or affiliated with any PACA licensee for a period of at least one year without USDA approval.
Individuals not responsibly connected to AL violator
USDA made an initial determination that Steve Alexander, API Holdings LLC, Scott Grinstead, Michael S. Rawlings, Drew Johnson, Jonathan Dyer and Steve Finberg were responsibly connected to Adams and subject to employment sanction. Michael S. Rawlings, Drew Johnson, Jonathan Dyer and Steve Finberg disputed this initial determination. USDA has now determined that Michael S. Rawlings, Drew Johnson and Jonathan Dyer were not responsibly connected to Adams.
Therefore, Michael Rawlings, Drew Johnson and Jonathan Dyer are under no employment sanctions and may be employed by or affiliated with any PACA licensee. Steve Finberg is continuing to challenge his responsibly connected status with the company.
The PACA Division, which is a part of AMS’ Fair Trade Practices Program, regulates fair trading practices of produce businesses that are operating subject to the PACA, including buyers, sellers, commission merchants, dealers and brokers within the fruit and vegetable industry.
Click here for an overview of companies who previously violated PACA.
For more information:
John Koller
USDA
Tel: +1 202 720 2890
Email: PACAdispute@usda.gov
www.ams.usda.gov