CEO at heart of tomato probe charged with racketeering

By Caroline Scott-Thomas

- Last updated on GMT

Related tags Sk foods Federal bureau of investigation

Former owner and CEO of SK Foods Frederick Scott Salyer has been charged with running his company as a criminal racketeering enterprise for more than a decade and could face up to 20 years in prison.

According to federal authorities in Sacramento, Salyer is alleged to have ordered payment of $390,000-worth of bribes to company executives in order to ensure they bought tomato products from his company at above-market prices.

An ongoing federal lawsuit was filed against employees at SK Foods in August 2008, accusing them of distributing hundreds of thousands of dollars in bribes, price fixing, and mislabeling offences, following a three-and-a-half year investigation. The California-based company supplied about 15 percent of the bulk tomato paste and diced tomatoes supplied to American manufacturers of salsa, ketchup and juices and it is alleged to have regularly paid bribes to the purchasing managers of many of its customers, including Kraft Foods, Frito-Lay, B&G Foods, and Safeway.

"The investigation has exposed a web of corruption and fraud in the tomato products industry – centered at SK Foods,"​ US Attorney Benjamin Wagner said in a statement.

Salyer has been charged with racketeering, wire fraud and obstruction of justice. His lawyer Malcolm Segal said that Salyer intends to enter a plea of not guilty and dispute the charges.

Salyer, 54, was arrested by FBI agents at JFK airport in New York on February 4 as he disembarked from a flight from Paris. According to the complaint that led to his arrest, Salyer left the United States in October 2009, after several former SK Foods employees had pleaded guilty, with the intention of relocating permanently overseas.

This is the first time Salyer has been indicted in connection with the case.

The complaint alleged that he had been seeking permanent residence status in Uruguay, Paraguay, Andorra, and France, in the belief that he would not be extradited from those countries, and that he had siphoned millions of dollars from former SK Foods’ accounts into offshore bank accounts in the Caribbean and Lichtenstein.

Salyer had booked a flight to return to Europe on February 5, but instead appeared in court where a federal magistrate denied bail, saying that he had been planning an elaborate scheme to flee the country.

Meanwhile, the company’s vice president of operations Steven King was charged last week with intent to defraud and mislead by mislabeling moldy tomato products and releasing them onto the market. He has pleaded guilty to one count of food adulteration and misbranding, the tenth person to plead guilty in connection with the case.

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