An employee at SK Foods, which has been the subject of a federal inquiry into alleged bribery, price-fixing and mislabelling actions, pleaded guilty to causing the introduction of adulterated and misbranded food onto the marketplace with intent to defraud.
Jennifer Dahlam, a former record and business analyst at SK Foods, which produces tomato paste for use in food product manufacture, retail and foodservice markets, admitted to mislabelling products that should have been thrown out due to their high mould content.
Mould is a natural by-product of tomato products, but the US government sets limits on the amount of mould that may be present in tomato paste that is sold on the US market.
The product shipped by SK Foods did not constitute a health hazard even though they contained more mould than that allowed by regulations, said the acting US Attorney Lawrence Brown.
He stressed though that Dahlam’s actions were notable for the fraud perpetrated and the resulting unfair advantage that SK Foods received over competitors.
James Wahl, a former manager at Frito-Lay, also pleaded guilty to receiving $160,000 in bribes between 1998 and 2008 from SK Foods sales broker and director Randall Lee Rahal.
Wahl admitted he deprived Frito-Lay of its right to his honest services by steering contracts for processed tomato and other food products to SK Foods rather than industry competitors in return for the bribes, and he admitted providing SK Foods with proprietary and other information that allowed the tomato processor charge Frito-Lay inflated prices.
Sentencing in both cases is scheduled for the end of April, with Dahlman facing up to three years in prison, and Wahl up to 20 years.