Frederick Scott Salyer, who owned both a major tomato processing company and fresh vegetable grower-shipper operation in California, was sentenced Feb. 12 to six years in federal prison for racketeering.
In March of 2012, Mr. Salyer pleaded guilty to 11 felony charges stemming from an investigation of the processing operation. He was accused of fixing prices, bribing buyers, doctoring lab tests and other related charges.
During the multi-year investigation, close to a dozen other people, including purchasing managers for Safeway, Kraft Foods and Frito-Lay, were alleged to be part of the scheme and also pleaded guilty to various charges. In addition, several employees of SK Foods, Mr. Salyer's tomato processing operation, pled guilty in the case.
The case largely involved tomato paste from SK Foods, which had several processing plants in California's San Joaquin Valley. Salyer American Fresh Foods, a Salinas, CA, grower-shipper of lettuce and other vegetables also owned by Scott Salyer, was never implicated in the criminal case. However, it did have questionable financial ties to SK Foods and ended up ceasing operation in May of 2009. It soon was put in receivership and liquidated.
Many creditors, including growers, settled early and did receive payments. Depending upon the strength of their case, some received full payment, while others got partial payment. Litigation continued for many years but eventually all of the produce growers and shippers did receive settlements under the PACA Trust law that made them whole or close to whole in 2011.
The investigation of SK Foods began in August 2006 when an SK Foods vice president who had stolen more than $1 million from a rival tomato processor started working as an FBI informant. In 2008, the allegations of price-fixing and bribery surfaced. Early in 2009, SK Foods filed for bankruptcy protection and then was sold to a Singapore-based firm.
Mr. Salyer originally fled to Europe, where he allegedly had stashed part of his personal fortune. He was arrested during a brief return in early 2010.
Under the plea deal, Mr. Salyer agreed to forfeit to the United States $3.45 million that was in an Andorra bank, which is where he was while in Europe.
Under federal sentencing guidelines, the judge could have given Mr. Salyer a sentence of four to seven years. His lawyers asked for a four-year term, citing Mr. Salyer's many health concerns as well as the past two-and-a-half years in which he has served under house arrest in his Pebble Beach estate. Judging from his six-year sentence, the court did not appear to be swayed by that argument.