Former SK Foods v.p. charged in tomato scam

by Staff
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SACRAMENTO, CALIF. — Jeffrey Beasley, the former vice-president of industrial sales for SK Foods L.P., has agreed to plead guilty to participating in a conspiracy to commit fraud and the introduction of misbranded food into interstate commerce with the intent to defraud, said Lawrence G. Brown, the U.S. attorney for the eastern district of California. Mr. Beasley also has agreed to cooperate in the government’s ongoing investigation.

Mr. Beasley is the first senior executive with SK Foods to be charged in the case that involved the bribing of purchasing managers with several food processors to purchase tomato products from SK Foods rather than competitors. The bribes also allowed SK Foods access to bidding and other proprietary information from some of its competitors.

"The effect of this conspiracy was to provide lower quality processed tomato products at inflated prices," Mr. Brown said.

Robert L. Watson, James Richard Wahl and Robert Turner, former purchasing managers with Kraft Foods Inc., Frito-Lay North America, Inc. and B&G Foods, Inc., respectively, have all pled guilty to receiving bribes from a former SK Foods sales broker. Mr. Watson was sentenced in federal court to two years and three months in prison followed by two years of supervised release recently.

According to the charges, bribes paid to customer purchasing managers on behalf of SK Foods were made with the knowledge of Mr. Beasley and his co-conspirators, and at the direction of SK Foods’ senior leadership. In addition, it is alleged that Mr. Beasley and other executives at SK Foods routinely falsified and directed other SK Foods employees to falsify the various grading factors and data contained on certificates of analysis and other quality control documents. The falsifications were undertaken in order to make it appear to customers as if the tomato products they were receiving from SK Foods were in compliance with contractual specifications.

One SK Foods employee who Mr. Beasley directed to falsify documents was Jennifer Lou Dahlman, the former records and business analyst for SK Foods. Ms. Dahlman pled guilty in February to causing the shipment of processed tomato products that were adulterated and unsalable due to excessive mold content. She admitted to routinely falsifying the various grading factors and results of laboratory testing contained on certificates of analysis. Ms. Dahlman further admitted that her actions were conducted at the direction of senior leaders and directors of SK Foods.

In May, SK Foods L.P. filed for Chapter 11 bankruptcy protection. In June, the company’s assets were acquired by Olam International of Singapore.

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