Former owner of SK Foods sentenced to 6 years in prison
SACRAMENTO — Frederick Scott Salyer, 57, of Pebble Beach was sent to prison with a six-year sentence Tuesday by United States District Judge Lawrence K. Karlton.
In addition, the term is to be followed by three years of supervised release, for racketeering and price fixing, United States Attorney Benjamin B. Wagner announced.
The judge also ordered a forfeiture of $3.45 million. A restitution hearing is set for March 9. Salyer is scheduled to self-surrender on April 9.
According to court documents, 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. In his plea, Salyer admitted that he operated SK Foods as a racketeering organization. From January 2004 to April 2008, Salyer encouraged food broker Randall Rahal to pay bribes and kickbacks to purchasing officers employed by SK Foods’s customers Kraft Foods, Frito-Lay, and B&G Foods.
At Salyer’s 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.”
Wagner said, “Scott Salyer used bribery and fraud to deceive his customers about SK Foods’ products in order to maximize his profits. Over a period of years, he turned his company into a machine of corruption and economic crime. This case is ending, but our efforts to ensure the integrity of the agriculture and food processing industry in this region will continue.”
According to court documents, the investigation began in August 2006, when federal agents executed a search warrant at the home of Anthony Manuel, an SK Foods employee. Manuel had embezzled approximately $1 million from his former employer, a competitor of SK Foods. Manuel promptly confessed to the embezzlement and later told agents about the crimes to which Salyer and others have now pleaded guilty.
In 2009, the bribe recipients and many of Salyer’s subordinates at SK Foods pleaded guilty before Judge Karlton. Also that year, creditors forced SK Foods into bankruptcy. According to court documents, in late 2009, Salyer moved more than $3 million to Andorra and made a $50,000 deposit on a condominium there. Andorra is a small principality in the Pyrenees Mountains between France and Spain and has no extradition treaty with the United States.
When agents learned of Salyer’s plans, they obtained an arrest warrant for him, which was executed on Feb. 4, 2010 when Salyer made what was to have been a short visit back to the United States. Salyer was jailed as a flight risk until Sept. 3, 2010 when he was released to house arrest after posting a $6 million bond.
Salyer was indicted by a federal grand jury on Feb. 18, 2010 with a superseding indictment brought against him on April 29, 2010. According to court documents, several issues have been litigated, such as whether the evidence against Salyer had been obtained lawfully.
Judge Karlton ultimately rejected Salyer’s efforts to suppress the evidence gathered by Manuel. Judge Karlton also upheld the wiretap and search warrant applications.
Salyer pleaded guilty on March 23, 2012. Ten other defendants have pleaded guilty, two have been sentenced and the remaining eight are scheduled to be sentenced on Feb. 26.