Another guilty plea in SK Foods tomato probe

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Sk foods

A former food company purchasing manager pleaded guilty on Tuesday to accepting $65,000 in bribes to funnel business to a tomato processor at the heart of an investigation into a number of illicit activities.

The ongoing federal 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.

Robert Turner formerly worked for New Jersey-based B&G Foods and accepted the bribes on the understanding that he would only buy tomato products from SK Foods, thereby shutting out competition and keeping prices high. The US Attorney’s office said that Turner admitted to honest services mail fraud, meaning that he had accepted inducements that deprived B&G Foods of his honest services as a purchasing manager. Prosecutors said that he had taken bribes between 2004 and 2008 during his employment at B&G Foods and previously, when he was employed by Nabisco.

Backhanders

SK Foods and its directors have not been accused of any crimes, but some of its employees have pleaded guilty, including Randall Lee Rahal, a former sales broker at the company who bribed Turner, among others. Rahal admitted in December that he had offered bribes to purchasing managers at some of the country’s largest food companies in order to secure business for SK Foods.

Turner has agreed to pay the bribe money back to his former employers. He is due to be sentenced on August 4 and faces up to 20 years in prison.

In January, senior purchasing manager for Kraft, Robert Watson, pleaded guilty to accepting $158,000 in bribes from Rahal and, in February, James Wahl, a former manager at Frito-Lay, also admitted receiving $160,000 in bribes between 1998 and 2008 from the sales broker. Moreover, he admitted providing SK Foods with proprietary and other information that allowed the tomato processor to charge Frito-Lay inflated prices.

Moldy tomatoes

Also in February, Jennifer Dahlam, a former record and business analyst at SK Foods, 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 products shipped by SK Foods did not constitute a health hazard even though they contained more mold than that allowed by regulations, said the acting US Attorney Lawrence Brown at the time.

He stressed though that Dahlam’s actions were notable for the fraud perpetrated and the resulting unfair advantage that SK Foods received over competitors.

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