WASHINGTON, DC - The U.S. Department of Agriculture (USDA) has imposed sanctions on Custom Fresh Cuts for failing to meet its contractual obligations to the sellers of produce it purchased from under the Perishable Agricultural Commodities Act (PACA). As part of these sanctions, the Los Angeles-based company and the principal operator of the business will be barred from engaging in PACA-licensed business or other activities without approval from USDA.
Direct from the USDA Agricultural Marketing Service:
By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
Custom Fresh Cuts failed to pay $696,769 to ten sellers for produce that was purchased, received and accepted in interstate and foreign commerce from November 2017 to June 2018. This is in violation of the PACA. Custom Fresh Cuts cannot operate in the produce industry until May 26, 2022, and then only after they apply for and are issued a new PACA license by USDA.
The company’s principals, Alejandro Mora and Richard Wise, may not be employed by or affiliated with any PACA licensee until May 26, 2021, and then only with the posting of a USDA-approved surety bond.
The USDA is required to publish the finding that a business has committed willful, repeated and flagrant violations of PACA as well as impose restrictions against those principals determined to be responsibly connected to the business during the violation period. 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 a part of AMS’ Fair Trade Practices Program, 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, the USDA resolved approximately 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million. These are just two examples of how the USDA continues to support the fruit and vegetable industry.
For more information and to read the press release in its entirety, please visit the link here.
