Bloomberg News

Ex-SK Foods Chief Pleads Guilty to Racketeering Charges

March 23, 2012

A former chief executive officer of SK Foods LP, the Lemoore, California-based processor of tomato products, pleaded guilty to racketeering charges for bribing customers and selling goods containing illegally high levels of mold.

Frederick Scott Salyer entered the plea today in federal court in Sacramento, California, according to court records. A federal grand jury last year returned a seven-count indictment against Salyer, alleging that from 1990 to 2008 he orchestrated schemes to pay bribes to purchasing managers for customers including Kraft Foods Inc. (KFT) and Frito-Lay Inc. to ensure they bought products from SK Foods, prosecutors said.

At Salyer’s direction, SK employees falsified documents concerning the percentage of natural tomato solids, mold count and production date of its products, according to the plea agreement. “SK Foods falsified this date for the purpose of inducing its customers to accept product that the customers may otherwise have rejected,” according to the agreement.

SK Foods customers paid inflated prices for tomato products, and millions of pounds of substandard merchandise was shipped as a result of the company’s conduct, though the issues didn’t create a health hazard for consumers, prosecutors said previously. Nine individuals employed by SK Foods or its customers previously pleaded guilty as part of the the government’s probe into SK, prosecutors said.

Salyer, who also pleaded guilty to price-fixing and is scheduled to be sentenced July 10, faces a sentence of four years to seven years in prison, according to his plea agreement, which requires a judge’s approval.

His lawyer, Brian Ferrall, declined to comment on today’s plea.

The case is U.S. v. Salyer, 10-00061, U.S. District Court, Eastern District of California (Sacramento).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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