WASHINGTON, DC - The U.S. Department of Agriculture (USDA) recently imposed sanctions on five produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased from. The California-, Florida-, New Jersey-, and Texas-based businesses failed to pay reparations amounting to $125,768, issued under the Perishable Agricultural Commodities Act (PACA). This will result in the suspension of their PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from the USDA.
Direct from the USDA Agricultural Marketing Service:
The following businesses and individuals are currently restricted from operating in the produce industry:
- John Lee, Jr., doing business as Produce Perfection, operating out of Vernon, California, for failing to pay a $17,228, award in favor of a California seller. As of the issuance date of the reparation order, John S. Lee, Jr., was listed as the sole proprietor of the business.
- AM Group Inc., operating out of Fresno, California, for failing to pay a $78,874 award in favor of a California seller. As of the issuance date of the reparation order, Christopher Kim was listed as the officer, director and/or major stockholder of the business.
- V & M Fresh Produce LLC, operating out of Tampa, Florida, for failing to pay an $18,973 award in favor of a Florida seller. As of the issuance date of the reparation order, Emilia Merchan was listed as a member or manager of the business.
- New York Produce Inc., operating out of Secaucus, New Jersey, for failing to pay a $2,394 award in favor of a New Jersey seller. As of the issuance date of the reparation order, Elio Valdivia was listed as the officer, director and/or major stockholder of the business.
- Start Produce Inc., operating out of San Antonio, Texas, for failing to pay a $8,299 award in favor of a Texas seller. As of the issuance date of the reparation order, Rohen Pimentel was listed as the officer, director and/or major stockholder of the business.
PACA provides an administrative forum to handle disputes involving produce transactions; this may result in the USDA’s issuance of a reparation order that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. The 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 in the Fair Trade Practices Program in the 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, 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.
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