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Federal lawsuit accuses SK Foods of bribery scheme(Sacramento Bee, The (CA) (KRT) Via Acquire Media NewsEdge) Aug. 17--A federal government lawsuit accuses SK Foods, a vegetable grower and processor with two major Central Valley plants, of a far-flung bribery scheme implicating individual employees at some of the nation's top food companies. SK Foods has paid hundreds of thousands of dollars in bribes to purchasing agents of corporate customers to ensure sales and maintain higher prices than competitors, the civil suit charges. The company -- with corporate offices in Monterey and processing and shipping plants in Williams, 50 miles north of Sacramento, and Lemoore, south of Fresno -- sells to manufacturers as well as retail and food service markets. It is part of SK Foods Group, owner of Salyer American Fresh Foods, SK Frozen Foods and Cedenco Foods Ltd. of New Zealand. The suit, filed Thursday in Sacramento federal court, seeks an order forfeiting $600,000 seized in April by the Internal Revenue Service from a broker of SK Foods products. While its civil suit progresses, the government will pursue possible criminal charges. Assistant U.S. Attorney Anne Pings is leading that effort. The mechanics of the bribery scheme violated mail and wire fraud statutes, and the money is "traceable to ... unlawful activity," the suit states. It says broker Randall Rahal, through his New Jersey-based Intramark USA corporation, paid bribes to purchasing managers with money he received from SK Foods. Payments were meant to subvert bidding and guarantee sales at higher prices of tomato paste, jalapeno peppers and other goods to Kraft Foods Inc.; H.J. Heinz Co.; McCormick & Co. Inc.; Frito-Lay North America; Safeway Inc.; ConAgra Foods Inc.; Agusa; B&G Foods; and others. The buyers are further accused of feeding Rahal information about bids of competing suppliers. When they were visited by federal agents in April, buyers for Agusa, Frito-Lay, Kraft and Safeway admitted receiving bribes from Rahal, the suit says. It says Rahal, in connection with his work "on behalf of SK Foods" from "at least January 2004 through at least April 2008," ran Intramark as a "racketeering enterprise." The scheme allegedly was carried out with the knowledge of certain SK Foods employees and Scott Salyer, founder and chief executive officer of the privately held firm. Aside from Salyer and Rahal, individuals are identified in the suit only by numbers or initials, company affiliations, and titles and locations. Salyer did not return a call left at his office. Rahal did not return calls left at his home and office. In a prepared statement, SK Foods said it "continues to cooperate fully in the government's investigation," and stressed that the suit "has nothing to do with food quality or safety." The statement said the company "is not in a position to comment on allegations pertaining to (Intramark) or the government's attempt to obtain a forfeiture of its funds." The suit was filed by Assistant U.S. Attorney Kristin Door, a forfeiture specialist, and includes a 36-page sworn declaration of FBI Special Agent Paul Artley, a white-collar crime investigator, detailing a three-year investigation by the FBI and IRS. Agents cultivated employees and former employees of the company as sources and tapped Intramark's telephone and Rahal's cellular phone. Brian Maschler, a San Francisco attorney who represents SK Foods, said Friday he believes excerpts of taps included in Artley's declaration could turn out to be misleading once their full context is revealed. He said the government's suit tries to connect Intramark's alleged conduct to SK Foods "through isolated snippets of recorded conversations. "As you know, excerpts can often give a distorted picture of events." Maschler said. "We don't yet have transcripts of the full conversations, but that's my preliminary observation." In one phone conversation between Salyer and Rahal, the broker tells the SK chief a buyer is "gonna need a retirement program. So, it's a perfect fit for me." Salyer asks, "How fast are you going to reel in that fish?" Rahal, referring to a dinner meeting he has set up with the buyer, says, "Probably by the time the coffee comes." An enthusiastic Salyer replies, "I want that sucker on speed reel." In Artley's declaration, a former SK employee appears to tell agents of a method Rahal used to determine if a buyer would be open to bribes. The broker would drop a $100 bill on the ground, pick it up and say to the buyer, "You must have dropped this. Is it yours?" If the buyer claimed the bill, Rahal would know "they are open to a business offer," the witness told agents. And, in a meeting at a Lemoore restaurant between Rahal and an Agusa buyer, surveilled by agents, the broker was photographed apparently handing the buyer an envelope, and overheard saying, "Put that in your pocket. The more you can give me, the more you will get. I don't need it. You do." The former SK employee recounts a conversation he had with Rahal, "in the presence of others," in which the broker said he makes payoffs through Intramark "to insulate SK Foods from any fallout or lawsuits if he ever got caught or sued." To see more of The Sacramento Bee, or to subscribe to the newspaper, go to http://www.sacbee.com/. Copyright (c) 2008, The Sacramento Bee, Calif. Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |