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. Businesses in California, Florida, Georgia, Pennsylvania, and Rhode Island failed to pay reparations amounting to $229,520, 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:
- Montecito Fresh Produce Inc., operating out of Los Angeles, California, for failing to pay a $22,320 award in favor of a California seller. As of the issuance date of the reparation order, Evangelino Reynoso and Manuel Reynoso were listed as the officers, directors, and/or major stockholders of the business.
- Florida Cool Cargo Inc., operating out of Miami, Florida, for failing to pay a $43,066 award in favor of a Florida seller. As of the issuance date of the reparation order, Jesse Fernandez was listed as the officer, director, and/or major stockholder of the business.
- Jusgo Duluth LLC, operating out of Duluth, Georgia, for failing to pay a $135,785 award in favor of a California seller. As of the issuance date of the reparation order, Wang Lin was listed as a member or manager of the business.
- Hunter Bros. Inc., operating out of Philadelphia, Pennsylvania, for failing to pay a $21,061 award in favor of a California seller. As of the issuance date of the reparation order, Frank Wiechec, III was listed as the officer, director, and/or major stockholder of the business.
- Y Farms LLC, operating out of Newport, Rhode Island, for failing to pay a $7,288 award in favor of a Florida seller. As of the issuance date of the reparation order, Eric Guzman was listed as a member or manager 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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