SK Foods’ Former Owner and CEO Scott Salyer Pleads Guilty to Racketeering and Price Fixing in California
SACRAMENTO—Frederick Scott Salyer, 56, of Pebble Beach, California, pleaded guilty today to racketeering and price fixing, U.S. Attorney Benjamin B. Wagner announced. Salyer entered his plea before U.S. District Judge Lawrence K. Karlton.
Between 1990 and 2009, Salyer was the CEO and owner of SK Foods LP, a grower, processor, and international seller of tomato paste and other processed agricultural products with facilities in Monterey, Lemoore, Williams, and Ripon, California. In his plea, Salyer admitted that he operated SK Foods as a racketeering organization. According to the plea agreement, from January 2004 to April 2008, Salyer encouraged food broker Randall Rahal to pay bribes and kickbacks to purchasing officers employed by SK Foods’ customers Kraft Foods, Frito-Lay, and B&G Foods. The intent was to induce Kraft’s Robert Watson, Frito-Lay’s Richard Wahl, and B&G’s Robert Turner to promote the interests of SK Foods over their employers’ interests. Salyer also admitted that at his direction, SK Foods routinely falsified the lab test results for its tomato paste. Salyer ordered former employees Alan Huey and Jennifer Dahlman to falsify tomato paste grading factors, and SK Foods lied about its product’s percentage of natural tomato soluble solids, mold count, production date, and whether the tomato paste qualified as “organic.” Finally, Salyer admitted that he had discussed an illegal target price agreement with other sellers of tomato paste and, when another co-conspirator offered a lower price, Salyer got the co-conspirator to agree to withdraw that offer to a customer.
U.S. Attorney Benjamin B. Wagner said, “Food grown in California’s Central Valley feeds people all over the United States; agriculture and food processing are critical to this region’s economy. This case of corporate corruption was met with the government’s full arsenal of law enforcement tools, which included grand jury process, an informant operation, wiretaps, search warrants, computer forensics, and arrests. This office and its partners will continue to use these tools to attack fraud and corruption wherever it is detected in this district.”
“The Antitrust Division has made antitrust enforcement in the agriculture sector a priority,” said Acting Assistant Attorney General Sharis A. Pozen in charge of the Department of Justice’s Antitrust Division. “The division is committed to continuing to work with its law enforcement partners to crack down on illegal price fixing conspiracies that affect products used by consumers in their everyday lives.”
“Corruption in any form is despicable, but when such occurs within the food industry, it erodes public trust in products and threatens the industry as a whole,” said Herbert M. Brown, Special Agent in Charge of the FBI’s Sacramento Field Office. “The FBI continues to tirelessly combat white collar crime that is motivated by unscrupulous greed.”