WASHINGTON, DC - As part of its efforts to enforce the Perishable Agricultural Commodities Act (PACA) and ensure fair trading practices within the U.S. produce industry, the U.S. Department of Agriculture (USDA) has imposed sanctions on four produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the PACA. These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from USDA. 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.
According to a press release, the following businesses and individuals are currently restricted from operating in the produce industry:
- La Ganga Produce Corp., operating out of Miami, Fla., for failing to pay a $12,240 award in favor of a Texas seller. As of the issuance date of the reparation order, Rogelio E. Velasquez was listed as the officer, director and major stockholder of the business.
- La Central Produce LLC, operating out of Forest Park, Ga., for failing to pay a $10,496 award in favor of a Texas seller. As of the issuance date of the reparation order, Jose J. Morales was listed as a member of the business.
- Newmarkets Inc., doing business as Back to the Land Natural Foods, operating out of Brooklyn, N.Y., for failing to pay a $15,585 award in favor of a Pennsylvania seller. As of the issuance date of the reparation order, David A. Basham was listed as the officer, director and major stockholder of the business.
- Lozamax Distributors LLC, operating out of Pharr, Texas, for failing to pay a $92,900 award in favor of an Arizona seller. As of the issuance date of the reparation order, Joaquin Urias, Jorge Gonzales-Pardo, Rodolfo Zambrano-Gonzales, Jorge Luis Linares-Gonzales, Alejandro Rizo and Luis Espinoza-Gonzales were listed as members of the business.
PACA provides an administrative forum to handle disputes involving produce transactions; this may result in 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. 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, USDA resolved approximately 3,350 PACA claims involving more than $63 million. PACA staff also assisted more than 8,000 callers with issues valued at approximately $156 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.
