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Kraft Foods buyer gets prison sentence in tomato scandal

By Caroline Scott-Thomas , 13-Aug-2009

A former Kraft Foods executive has been sentenced to two years and three months in prison for accepting bribes from Californian tomato product supplier SK Foods, becoming the first to be sentenced in the case.

Robert Watson pleaded guilty in January to accepting bribes between 2004 and 2008 from Randall Lee Rahal, then a sales broker for SK Foods. The bribes, which amounted to $158,000, were intended to ensure that Watson purchased tomato products only from SK Foods, thereby shutting out competition and keeping prices high.

SK Foods and its directors have not been accused of any crimes, but some of its employees have pleaded guilty, including Randall Lee Rahal, among others. Rahal admitted in December that he had offered bribes to purchasing managers at some of the country’s largest food companies.

Watson has also been ordered by Sacramento federal court US District Judge Lawrence K. Karlton to pay $1.85m to Kraft to remunerate the company for its losses, after he facilitated the sale of millions of pounds of tomato products at inflated prices.

Four others are still awaiting sentencing for their parts in the tomato scandal, including Rahal, as well as those who have admitted taking bribes from him – a former purchasing manager for B&G Foods, Robert Turner, and a former manager at Frito-Lay, James Wahl.

Jennifer Dahlam, a former record and business analyst at SK Foods, is also awaiting sentencing. She admitted to causing the introduction of adulterated and misbranded food onto the marketplace with intent to defraud, by mislabeling products that should have been thrown out due to their high mold content.

The lawsuit was filed against employees at SK Foods in August last year, accusing them of distributing hundreds of thousands of dollars in bribes, price fixing, and mislabeling offences. The California-based company supplies about 15 percent of the bulk tomato paste and diced tomatoes supplied to American manufacturers of salsa, ketchup and juices.

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