Former SK Foods chief pleads guilty to tomato price fixing

The former chief executive officer and owner of SK Foods LP, which used to own what is now Olam Tomato Processors in Williams, has pleaded guilty in federal court to racketeering and price fixing, the U.S. Attorney General's Office in Sacramento reported.

Frederick Scott Salyer, 56, of Pebble Beach, pleaded guilty Friday as part of a plea bargain, capping a nearly six-year investigation that led to convictions of 11 officials of the company.

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 Attorney General's Office reported.

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.

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. That investigation began in August 2006, when federal agents executed a search warrant at the home of Anthony Manuel, an SK Foods employee who had embezzled approximately $1 million from his former employer, a competitor of SK Foods.

Manuel confessed to the embezzlement and then became the key informant and provided critical documentation about the criminal activity at SK Foods, the Attorney General's Office reported.

"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," U.S. Attorney Benjamin B. Wagner said in a statement.

Salyer is scheduled to be sentenced by U.S. District Judge Lawrence K. Karlton on July 10.