Scott Salyer, former CEO of SK Foods LP, pleads guilty to allegations of price-fixing, bribery and racketeering. 

SK Foods, LP was a grower and processor of tomato and other food products.  According to various court documents, SK Foods paid bribes and kickbacks to purchasing agents of several of SK Foods’ customers.  In return for these routine payments, purchasing managers at B&G Foods, Inc., Frito-Lay, Inc. and Kraft Foods, Inc. promoted SK Foods products at their respective companies in order to ensure SK Foods obtained certain supply contracts.

According to these same documents, SK Foods also routinely and materially falsified the values of the various grading factors and data contained on the certificates of analysis, bills of lading, invoices, and bin labels.   These documents were falsified in order to make it appear to SK Foods’ customers that they were in fact receiving product that met their purchasing requirements and to avoid rejections of troubled product.  A specific example of this type of activity included the alleged modification of the labeling on certain tomato paste from conventional to organic.  This labeling change was alleged to have been made in order to make a sale to a customer who would not purchase conventional tomato paste. 

The court documents further discuss a price-fixing scheme involving product sold to McCain Foods, USA, Inc.  The primary purpose of the alleged price-fixing scheme was to install a floor in the base price for tomato paste sold to McCain Foods through a competitive bidding process.

Assuming the Court accepts the plea agreement, Salyer may face between four and seven years of incarceration.  In addition, Salyer must forfeit to the United States his right, title and interest in millions of dollars he transferred out of the United States in January of 2010.

Scott Salyer Pleads Guilty in Tomato Fraud Case – The Packer