US (CA): Executive pleads guilty to tomato price fixing
Frederick Scott Salyer, 56, was charged with bribing purchasing managers at food giants including Kraft Foods Inc. and Frito-Lay to buy tomato products from his company, Monterey-based SK Foods. Prosecutors said he and his co-conspirators fixed prices and rigged bids for the sale of tomato products to McCain Foods USA Inc., ConAgra Foods Inc. and Kraft.
He pleaded guilty to both racketerring and price fixing. The former carries a maximum sentence of 20 years and the latter 10 years, however, under a plea arrangement it is expected that Salyer will spend in the region of 4-7 years in custody. He is currently under house arrest and will be sentenced on July 10th.
He also admitted that his company routinely falsified laboratory test results for tomato paste and that he ordered employees to tell lies regarding produce, for example, whether it could be considered organic or not.
"Salyer and his co-conspirators manipulated prices on millions of pounds of processed tomatoes and improperly influenced supermarkets and big food companies into buying substandard tomato products put into brands found in almost every American home," said Rick Goss, the assistant special agent in charge of the Internal Revenue Service's criminal investigations unit. "Salyer and the defendants' scheme ripped off consumers and reaped big profits."
Herbert M. Brown, special agent in charge of the FBI's Sacramento field office, said it took authorities more than six years to unravel the "web of lies and bribes that Salyer and his cohorts wove."
Buyers from Kraft, PepsiCo Inc.'s Frito-Lay unit, Safeway Inc. and B&G Foods Inc. have pleaded guilty to accepting bribes in the case. In all, 10 former employees or customers of SK Foods have pleaded guilty in the investigation. U.S. Attorney Benjamin Wagner said about $100,000 in bribes changed hands.
Source: www.businessweek.com
