A federal grand jury has returned a seven-count indictment charging Frederick Scott Salyer, former owner and CEO of SK Foods, of violations including racketeering and fraud, according to a press release from the US Department of Justice.
US Attorney Benjamin B. Wagner said the charges are in connection with Mr Salyer’s direction of various schemes to defraud SK Foods’ corporate customers through bribery, food mis-branding and adulteration, and with wire fraud and the obstruction of justice.
SK Foods former vice-president for operations Steven James King – the 10th person charged in connection with the case – was also charged with one count of food adulteration and mis-branding. He has agreed to plead guilty and to cooperate in the ongoing investigation and prosecution.
According to the indictment, SK Foods and its related corporate entities constituted a racketeering enterprise, an organisation that Mr Salyer directed, and other SK Foods leaders and employees helped to further through a variety of illicit activities.
It is alleged that over a period of 10 years, Mr 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.
As the racketeering enterprise’s leader and primary decision maker, Mr Salyer is also alleged to have directed a widespread practice of selling and shipping processed tomato product that did not meet contractual specifications, contained mould levels in excess of the thresholds established by the FDA and was therefore unsaleable domestically.
Mr Salyer is also charged with obstructing justice by ordering the alteration and falsification of certain SK Foods’ corporate records after the government’s investigation of the company became known.
On 4 February 2010, FBI Special Agents arrested Mr Salyer at Kennedy International Airport in New York City, based on a criminal complaint charging him with 20 counts of mail and wire fraud.
Mr Salyer has so far been refused bail after attempting to orchestrate what US Magistrate Judge Steven Gold described as one of the “most elaborate schemes to flee he had ever seen”.
The current charges against Mr Salyer and Mr King are the latest in the ongoing investigation of conduct at SK Foods. The investigation has yet to be concluded.
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