WASHINGTON, DC – The U.S. Department of Agriculture has imposed sanctions on three produce businesses, according to a USDA press release, after the companies failed to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).
The three businesses that are restricted from operating in the produce industry currently are as follows:
- Arizona Marketing Produce Distributors Inc., operating out of Phoenix, AZ, for failing to pay a $39,191 award in favor of a California seller. As of the issuance date of the reparation order, Lorin N. Hobbs was listed as the officer, director and major stockholder of the business.
- Overland Xpress LLC, operating out of Cincinnati, OH, for failing to pay a $28,562 award in favor of a Florida seller. As of the issuance date of the reparation order, Andoni Bledar and Jason M. Brown were listed as members of the business.
- Lider Fresh Company, operating out of McAllen, TX, for failing to pay a $5,600 award in favor of an Arizona seller. As of the issuance date of the reparation order, Franciso A. Feliz Marmolejos was listed as the officer, director and major stockholder of the business.
PACA provides an administrative forum to handle disputes involving produce transactions. This may result in a reparation order being issued that requires damages to be paid by those not meeting contractual obligations in buying and selling fresh and frozen fruits and vegetables. USDA is required to suspend the license or impose sanctions on an unlicensed business that fails to pay PACA reparations awarded against it, as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued. Those individuals, including sole proprietors, partners, members, managers, officers, directors or major stockholders may not be employed by or affiliated with any PACA licensee without USDA-approval.
The PACA Division, which is part of USDA’s Agricultural Marketing Service, regulates fair-trading practices of produce businesses that are operating subject to PACA including buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry.
In the past three years, USDA resolved approximately 3,400 PACA claims involving more than $58 million. PACA staff also assisted more than 8,500 callers with issues valued at approximately $151 million. These are just two examples of how the USDA continues to support the fruit and vegetable industry.
