Europol has announced the arrests of 66 people following a four-year investigation into an organized-crime group accused of selling horsemeat "not suitable for consumption" as beef products. The investigation began in 2013 after Irish authorities found products sold as beef burgers that contained horsemeat and led to a Dutch man in Spain alleged to be the leader of the scheme. According to Europol's July 16, 2017, press release, "Investigators concluded that the Spanish element of this organisation was a small part of the whole European structure controlled by the Dutch suspect." Issue 641
Tag Archives criminal
A California federal court has dismissed Racketeer Influence and Corrupt Organizations Act (RICO) claims against tomato-processing companies Los Gatos and Ingomar but will allow a bribery claim to proceed. Morning Star Packing Co. v. SK Foods, L.P., No. 9-0208 (E.D. Cal., order entered June 14, 2017). The Morning Star Packing Co. brought a RICO and bribery lawsuit against several competitors in 2009, alleging they conspired to fix prices, rig bids and avoid competing for the same customers. The court dismissed Morning Star's RICO claims against Ingomar and Los Gatos, finding that the company could not show that the competitors committed two injurious predicate acts. Similar claims against other competitors—SK Foods and Intramark—were not at issue in the ruling and will proceed to trial. The court refused to grant summary judgment on Morning Star’s bribery allegations against Ingomar. “Viewing this evidence in the light most favorable to Morning Star, and drawing all…
The attorney general of New Jersey has announced an “unprecedented” $2-million fine in a settlement with a craft beer and spirit wholesaler accused of trade practice violations. Div. of Alcoholic Beverage Control v. Hunterdon Brewing Co. LLC, No. L0002 (N.J. Dep't of Law Public Safety, consent order filed May 31, 2017). New Jersey alleged that Hunterdon Brewing sold tap systems at below-market prices then overcharged those customers by including “miscellaneous draft charges” on invoices. Further, the company allegedly ignored state credit regulations and entered into discriminatory, “unequal financing” terms of sales with its customers. Hunterdon has agreed to pay the fine in four $500,000 installments over the next 12 months; $250,000 of the final payment will be waived if compliance audits show no further violations. “Fair market prices exist for a reason,” said Attorney General Christopher Porrino in a June 12, 2017, press release. “Consumers suffer when these laws and…
The U.S. Supreme Court has denied certiorari in a six-state coalition's attempt to block enforcement of a California law requiring egg-production facilities to provide hens enough space to extend their limbs and turn around. Missouri v. Becerra, No. 16-1015 (U.S., denial of certiorari entered May 30, 2017). The rule affects private egg producers within each state, but the U.S. Court of Appeals for the Ninth Circuit found that this interest did not convey standing upon the states. Additional details on the circuit court's decision appear in Issue 623 of this Update. The high court also denied certiorari to Austin "Jack" DeCoster and his son Peter, who sought to appeal the prison sentences they received for their roles in a 2010 Salmonella outbreak that sickened thousands across the United States. DeCoster v. United States, No. 16-877 (U.S., denial of certiorari entered May 18, 2017). The men, former executives of Quality Egg…
The holding company of Brazilian meatpacker JBS SA has reportedly agreed to pay a $3.2-billion fine for the company’s involvement in a graft and bribery scandal involving more than 1,800 politicians, including President Michel Temer and former President Dilma Rousseff. J&F Investimentos, co-owned by brothers Joesley and Wesley Batista, will pay the fine to U.S. and Brazilian authorities over a period of 25 years. Joesley Batista stepped down as chairman and member of the JBS SA board of directors; Wesley Batista has resigned from the board but remains chief executive of the company. The Batistas purportedly told Brazilian federal prosecutors they had paid about $186 million in bribes to politicians, and JBS SA had already agreed to pay $183.8 million to settle its criminal liability for the bribes. See NPR, May 31, 2017. Issue 636
The Canadian Food Inspection Agency has reportedly filed charges against Creation Foods and its vice president Kefir Sadiklar alleging the company sold cheddar cheese falsely labeled as kosher to Jewish summer camps. The agency asserts that Creation Foods edited a digit in the product code to match the code of a cheese product approved as kosher. According to the Toronto Star, the Canadian government has never before brought an enforcement action against anyone accused of misrepresenting kosher food. See Toronto Star, May 9, 2017. Issue 635
Bumble Bee Foods, LLC has agreed to plead guilty to one felony count for its role in a conspiracy to fix prices of shelf-stable tuna and will pay a minimum $25 million fine. U.S. v. Bumble Bee Foods LLC, No. 17-CR-249 (N.D. Cal. May 8, 2017). According to the U.S. Department of Justice, Bumble Bee conspired with other seafood companies and their executives to inflate prices for canned and pouch tuna. Two Bumble Bee executives have already pleaded guilty to criminal charges; details appear in Issue 625 of this Update. “Today’s charge is the third to be filed—and the first to be filed against a corporate defendant—in the Antitrust Division’s ongoing investigation into price fixing among some of the largest suppliers of packaged seafood,” Acting Assistant Attorney General Andrew Finch said in a May 8, 2017, press release. “The division, along with our law enforcement colleagues, will continue to hold…
The U.S. Court of Appeals for the Eighth Circuit has upheld the convictions of Midamar Corp., founder William Aossey and his son Jalel Aossey, perpetrators of a scheme to falsely label meat as halal. U.S. v. Aossey, Nos. 161611, 161688, 161761 (8th Cir., order entered April 14, 2017). The court rejected the defendants’ arguments that the Department of Agriculture has sole jurisdiction over criminal prosecutions pursuant to the Meat Inspection Act, ruling that the federal statute did not include a “clear and unambiguous” expression that the Agriculture Department’s authority is exclusive. Additional details on the case against Midamar and the Aosseys appear in Issues 550, 572 and 596 of this Update. Issue 632
The owner of one of the largest commercial fishing businesses in the United States has pleaded guilty to conspiracy, falsifying federal records, cash smuggling and tax evasion in a case accusing him of deliberately misreporting the types of fish he caught to the National Oceanic and Atmospheric Administration (NOAA). U.S. v. Rafael, No. 16-10124 (D. Mass, plea entered March 30, 2017). Carlos Rafael, owner of Carlos Seafood, Inc. and known as the “Codfather,” will face possible forfeiture of his business assets and up to five years in prison at his June 2017 sentencing. An Internal Revenue Service (IRS) investigation apparently found that Rafael caught 800,000 pounds of fish over several years and reported it as haddock, pollock or other species with high NOAA quotas despite containing thousands of pounds of fish with lower quotas, including cod, flounder, grey sole, yellowtail and American plaice. Rafael also told IRS agents posing as…
John Fox, former owner of wine shop Premier Cru, has reportedly been sentenced to 6.5 years in prison after pleading guilty to wire fraud and defrauding investors out of at least $45 million. As part of the scheme, Fox sold wine to customers around the world, embezzled the money, then used newer purchasers’ money to buy and ship the wine promised to earlier purchasers, an arrangement one prosecutor called a “wine Ponzi scheme.” Fox reportedly spent the money on luxury cars, personal credit cards and gifts for women he met online. He began serving his sentence immediately. See Los Angeles Times, December 15, 2016. Issue 626
