Scott Salyer waiting to take off in Auckland, New Zealand in 2008
SUPPORTERS OF SCOTT SALYER, FORMER CEO OF SK FOODS
AND THE LEAD FIGURE IN THE GOVERNMENT'S
LABYRINTHINE 'OPERATION ROTTEN TOMATO' CASE,
SPEAK OUT AGAINST INJUSTICE AFTER HIS
FEBRUARY 12 SENTENCING
After sentencing Scott Salyer, former CEO of SK Foods, to six years in federal prison for his involvement in an alleged price-fixing scam, a labyrinthine case the U.S. Justice Department dubbed "Operation Rotten Tomato,” U.S. District Court Judge Lawrence K. Karlton made a succinct observation that summed up the reaction of Salyer's ardent supporters.
"Here's a millionaire who risked everything for nothing,” the judge said. "I don't understand it.”
Though Salyer pleaded guilty in March 2012 to charges of racketeering and price fixing stemming from a five-year investigation of practices in the processed tomato arm of SK Foods, his multitude of supporters has long believed that the prosecution was overzealous, vindictive and selective about the facts they chose to employ and dismiss in their case.
They point out that, according to Court documents, the government's claim that Salyer and 10 co-conspirators manipulated the price and quality of millions of pounds of processed tomatoes – by dispersing about $100,000 in bribes – is not only exaggerated, but never found to be true.
In the case, it was alleged that the company's market share gains were the result of hefty bribes paid to some of the nation's largest manufacturers. Court documents show that Chris Rufer of the The Morning Star Packing Company alleged this, but was actually part of the conspiracy when he had his attorney, Dale Campbell of Weintraub, Tobin, Chediak, Coleman and Grodin hire FBI Supervisor Donald Vilfer and planted Morning Star employee, Tony Manual, inside SK Foods, that created the crimes attached to Salyer and SK Foods. According to another court document filed by Keker and Van Nest, Salyer and SK Foods never paid a bribe to anyone.
The AP report on the sentencing said that buyers from Kraft, PepsiCo Inc.'s Frito-Lay unit, Safeway Inc. and B&G Foods Inc. have pleaded guilty to accepting bribes in the case. In all, 10 former employees or customers of SK Foods have pleaded guilty.
Salyer's supporters say that the B&G Foods buyer never pleaded guilty and that is the only "bribe” in Rahal's scheme that could be linked to SK. This is the $2,000 check referenced in the plea agreement.
Salyer's supporters contend that the $24K, the government discusses in court documents, as sent to Kraft's Robert Watson, was never cashed. Frito Lay's contract, according to documents filed with the court by Keker and Van Nest, was with Lidestri Foods, not SK Foods, and SK was a supplier to Lidestri on their Frito Lay contract. Though that is factual, SK Foods received Frito Lay's Supplier of the Year designation for several years for having supplied superior graded products through their Lidestri contract. The supporters add that Safeway also appears in the news media as having received bribes from Rahal but no connection to SK was proven. Hence does not appear in the plea agreement either.
The AP report states that "food companies lost more than $2 million through overpayments as a result of price fixing, federal investigators said.” In addition, companies often bought moldy and outdated tomato products as well as some falsely labeled as organic.
Salyer's supporters point out that a five page letter from Watson states point blank that SK saved Kraft money and there was no loss to anyone – so the alleged $2 million loss is another red herring. They add that calculations supplied to the court by Keker and Van Nest also proves no financial losses were sustained by anyone. The hearing on that matter is scheduled before Judge Karlton March 12, 2013.
The AP report said: "Though Salyer acknowledged that SK Foods routinely falsified lab test results, prosecutors said there is no evidence that consumers became ill after eating outdated or moldy tomatoes.” Salyer's supporters counter that Salyer never acknowledged this, inviting people to read Exhibit A of the plea agreement:
"In a transaction charged as Racketeering Act 8, on July 18, 2003, SK Foods, in Lemoore, California, mailed an invoice for 9,217 pounds of tomato paste to a customer in Pennsylvania. Consistent with Salyer's instructions to falsify information to match customers' contractual specifications, the tomato paste classification was falsified from conventional to organic.”
Court documents supplied by Keker and Van Nest address the issue that the government never ascertained why Jennifer Dahlman changed labels, they simply state that she changed labels and determined this as criminal conduct. According to one Supporter, who fearful of more retaliation against him wishes to remain unnamed, with intimate knowledge of the incident, contends that Erica Kuhlman an executive with Bank of Montreal insisted SK Foods hire a CPA, Glenn McClaren, who brought in another CPA and they deleted inventory data out of the computer system. The labeling process is how the inventory gets into the computer system so when they did that, they had to relabel to get the inventory back into the system. Inventory data was then lost when they changed the system over from AAS to DAX. Label printers were running round the clock after Tony Manual labeled 28 million pounds heading to ConAgra with a 100 Series Label. ConAgra's system has a 900 Series Label.
The sentencing report also claims that court documents show Salyer moved money to Andorra, a small country in the Pyrenees Mountains between France and Spain (which has no extradition treaty with the U.S.) and made a down payment on a condo there.