CA exec gets 6 years in tomato price-fixing scam
SACRAMENTO, Calif. (AP) — The former owner of a California tomato processing company was sentenced Tuesday to six years in federal prison for engaging in a price-fixing scam that authorities said involved bribing purchasing managers at food giants including Kraft Foods Inc. and Frito-Lay.
A U.S. District Court judge ordered 57-year-old Frederick Scott Salyer to begin serving the sentence on April 9, possibly at a minimum security prison camp in Lompoc.
Salyer is the product of one of the West’s oldest land dynasties, a multi-generation enterprise that started with cotton farming and branched into tomatoes under Salyer and his father.
By the time federal agents raided SK Foods in 2008, it had undergone a meteoric rise and captured 14 percent of the processed tomato market.
Salyer, who had been under house arrest in Pebble Beach, previously pleaded guilty to racketeering and price fixing. The charges carried maximum sentences of 20 and 10 years, respectively, but the terms were reduced as part of a plea agreement.
He also was sentenced to three years of probation.
The government found that Salyer and 10 co-conspirators manipulated the price and quality of millions of pounds of processed tomatoes by dispersing about $100,000 in bribes.
By then, his SK Foods had become the second-largest tomato processor in the state following the growth that amazed rivals until it was alleged that the market share gains were the result of hefty bribes paid to some of the largest manufacturers in the nation.
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.
California produces 90 percent of U.S. canning tomatoes, and Salyer operated processing plants in Lemoore and Williams in California’s Central Valley.
Food companies lost more than $2 million through overpayments as a result of price fixing, federal investigators said. In addition, companies often bought moldy and outdated tomato products as well as some falsely labeled as organic.
Salyer acknowledged that SK Foods routinely falsified lab test results. Prosecutors said there’s no evidence that consumers became ill after eating outdated or moldy tomatoes.
As part of his plea, Salyer agreed to forfeit at least $3.25 million in foreign bank accounts where prosecutors said he moved money after SK Foods filed for bankruptcy.
Court documents show he moved money to Andorra, a small country in the Pyrenees Mountains between France and Spain that has no extradition treaty with the U.S., and made a down payment on a condo there.