The U.S. Department of Agriculture (USDA) has imposed sanctions on seven produce businesses from three states for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).
These sanctions imposed during the last three weeks 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, the USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
According to the USDA, CKF Produce Corp. (CKF), of Brooklyn, N.Y., failed to pay $596,354 to 17 sellers for produce that was purchased, received and accepted in interstate and foreign commerce from March 2017 to November 2018. This is in violation of PACA.
CKF cannot operate in the produce industry until May 15, 2022, and then only after they apply for and are issued a new PACA license by USDA. The company’s principal, Koji Ueno, may not be employed by or affiliated with any PACA licensee until May 15, 2021, and then only with the posting of a USDA approved surety bond.
Two produce businesses from Florida and Texas are currently restricted from operating in the produce industry for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the PACA.
Lau Enterprises II Inc., operating out of Miami Lakes, Fla., for failing to pay a $7,132 award in favor of a Honduras seller. As of the issuance date of the reparation order, Leonardo Gonzalez was listed as the officer, director and/or major stockholder of the business.
Loreas Fresh Produce Inc., operating out of Pharr, Texas, for failing to pay a $4,270 award in favor of a Texas seller. As of the issuance date of the reparation order, Rolando Loera Mendoza was listed as the officer, director and/or major stockholder of the business.
The USDA also imposed sanctions on four produce businesses from Illinois and Texas:
G & A Foodservice Inc., doing business as Fresh Express Produce, operating out of Addison, Ill., for failing to pay a $7,095 award in favor of an Illinois seller. George Panagakis was listed as the officer, director, and major stockholder of the business.
Wholesale Mexcol LLC, operating out of Webster, Texas, for failing to pay an $11,840 award in favor of a California seller. Gustavo Soto Gómez was listed as a member of the business.
Big Tex Produce, operating out of Dallas, Texas, for failing to pay a $19,092 award in favor of a Texas seller. María Rayas and Viridiana Rodríguez were listed as members of the business.
Cal Tex Produce L.P., operating out of Dallas, Texas, for failing to pay an $8,030 award in favor of an Arkansas seller. Cal Texas Dissolution LLC and Johnny D. Rodríguez were listed as partners of the business. Another principal of the business at the time of the order was Jimmy W. Hutton. He has challenged his responsibly connected status.
The PACA Division, which is part of 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.