Former owner of SK Foods arrested on fraud charges

February 5th, 2010 - 3:06 pm ICT by BNO News  

SACRAMENTO, CALIFORNIA (BNO NEWS) – Former owner and CEO of SK Foods LP on Thursday was arrested at John F. Kennedy Airport in New York City.

Frederick S. Salyer, 54, is charged with 20 counts of mail and wire fraud in connection with his direction of various schemes to defraud SK Foods’ corporate customers through bribery and food misbranding and adulteration.

The charges allege that over a period of at least 10 years, Salyer orchestrated a number of wide-ranging schemes whereby SK Foods regularly paid bribes to the purchasing managers of many of its customers such as Kraft Foods Inc., Frito-Lay Inc., B&G Foods Inc., and Safeway Inc. to ensure that those customers purchased processed tomato products from SK Foods rather than from its competitors, and that they purchased the product from SK Foods at elevated, above-market prices.

In other instances, SK Foods’ bribes to purchasing managers were made in order to wrongfully obtain its competitors’ bid information.

As SK Foods’ leader and primary decision maker, Salyer is alleged to have directed a widespread practice of selling and shipping processed tomato product to customers that did not meet contractual specifications, and was adulterated because it contained mold levels in excess of the thresholds established by the U.S. Food and Drug Administration and was thus was not marketable domestically.

FBI Special Agents arrested Salyer at JFK International Airport in New York City this afternoon. According to the charges, Salyer left the United States in October 2009, following guilty pleas of several employees of SK Foods and some of its customers, intending to permanently relocate abroad.

Salyer had instructed a subordinate to sell many of Salyer’s belongings and had transferred millions of dollars from bank accounts formerly associated with SK Foods entities to bank accounts in the Caribbean and Liechtenstein.

The complaint alleges that Salyer spoke with a former SK Foods employee about obtaining permanent residence status in Uruguay, Paraguay, Andorra, and France because he believe he would not be extradited from these countries.

The maximum penalty on the mail and wire fraud charges is twenty years in prison, and a criminal fine of $250,000.

The case is the result of an investigation by the Federal Bureau of Investigation.

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