The ex-owner of a California tomato processing company was indicted after federal authorities alleged he sold moldy, old tomato products as good ones and bribed food companies to carry his higher-priced products and shut out competitors.
Frederick Scott Salyer's bribes allegedly led to Kraft Foods, Safeway, Frito-Lay and Gerber using SK Foods' products. The 54-year-old CEO of the Central Valley company was arrested earlier this month at JFK Airport in New York after returning from a trip to Switzerland. Authorities believed he was going to flee the country to avoid prosecution.
While in Switzerland "Salyer arranged for the transfer of millions of dollars from his business to personal accounts overseas," according to an FBI statement. "He also put his $7 million Pebble Beach home on the market."
The FBI states that Salyer and his company carried out the fraud for a period of 10 years before SK Foods declared bankruptcy in May and was bought out. The companies foods were found in found in sauces, ketchups, and juices, according to the bureau.
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The Los Angeles Times reports that most tomatoes sold in the U.S. are processed by four firms in California -- SK Foods having been on of them -- and that Salyer's company had as much as a one-fifth market share.
"Salyer routinely ordered products to be mislabeled," states the bureau. "As a result, consumers who thought they were getting organic as opposed to conventional products--and paying more for them--were being defrauded. In other cases, products with a recommended shelf life of one year were three years old when they hit the stores. And some of those products contained mold levels beyond limits established by the Food and Drug Administration."
He was charged with racketeering, wire and mail fraud, money laundering, and obstruction of justice.
(Spotted at LA Biz Observed).