The U.S. Department of Agriculture (USDA) has imposed sanctions on four produce businesses for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).
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 their contractual obligations in buying and selling fresh and frozen fruits and vegetables.
The following businesses and individuals are currently restricted from operating in the produce industry, according to a press release:
- Bara Tropical Inc., operating out of Miami, Fla., for failing to pay an $8,604 award in favor of a Texas seller. As of the issuance date of the reparation order, Maria M. Baglio and Flippo Baglio were listed as the officers, directors and/or major stockholders of the business.
- Fresh Produce Express LLC, operating out of Miami, Fla., for failing to pay a $7,024 award in favor of a South Carolina seller. As of the issuance date of the reparation order, Henry M. Cabrera was listed as a member of the business.
- Johnny Avocado Inc., operating out of Lynbrook, N.Y., for failing to pay a $52,075 award in favor of a California seller. As of the issuance date of the reparation order, Johnny Gouzos was listed as the officer, director and major stockholder of the business.
The Fruit Club Inc., operating out of Sioux Falls, S.D., continues to be restricted from operating in the produce industry for failing to pay a $108,384 award in favor of a Florida seller. As of the issuance date of the reparation order, Matthew Kleinsasser was listed as the officer, director and major stockholder of the business.
Subsequent to the issuance of the reparation order listed above, a new reparation order was issued against The Fruit Club Inc., to pay $67,500 to a Michigan seller. The Fruit Club Inc. has not made payment to the Michigan seller within the time designated in the new reparation order.
As a result, the sanction period levied against the company and its principal has been extended to reflect this new violation, according to the USDA.
Related Article: PACA Regulations Defends Traders of Agricultural Products
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.