SK Foods’ former CEO indicted for racketeering, corruption




A federal grand jury has indicted Frederick Scott Salyer, former owner and CEO of SK Foods, on charges of violating the Racketeer Influenced and Corrupt Organizations Act, as well as conspiracy, obstruction of justice and four counts of wire fraud,

the

Los Angeles Times

reported.

Salyer allegedly organized and led a decade-long conspiracy aimed to “quash competition and sell tomato products at inflated prices,” the article said. The scheme used more than $330,000 in bribes to obtain deals to sell SK Foods’ products to major companies including Kraft Foods Inc., Safeway Inc., Frito-Lay North America Inc. and Gerber Products Co., according to the report. The article noted that the conspirators sold tomato paste at a 30% markup or higher.

Salyer is “a member of one of [California’s] most powerful farming families,”

the LA Times

noted.

Salyer is the eldest son of one of the largest land barons in the Golden State’s history. His grandfather Clarence was a West Virginia mule skinner who parlayed a crop loan into an agricultural empire of more than 65,000 acres…. The Salyers were kings of cotton in the Central Valley, and earned a reputation for ruthless business dealings with politicians, outside rivals and family members alike…. When the investigation of SK Foods began in 2007, the company controlled 10% to 20% of [the U.S. tomato] market, according to prosecutors.

The

LA Times

article said ten people have pleaded guilty in the federal investigation; six worked for SK Foods, and four worked for the company’s customers.

SK Foods’ sales plunged as the case unfolded. It was sold out of Bankruptcy Court last year to a Singapore firm.

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Prosecutors said Salyer, who was arrested at New York’s John F. Kennedy Airport on Feb. 5, was living in Europe and planning to flee extradition. They said the conspiracy led to higher prices for consumers.

Besides the RICO violations, the grand jury also charged Salyer with obstructing justice by altering the minutes of a board of directors’ meeting to hide a connection between SK Foods and a director who had already pleaded guilty to racketeering, money laundering and other charges as part of the probe.

(Source:

Los Angeles Times,

Feb. 19, 2010.)

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