Industry News
Wholesalers, inspectors busted in bribery scheme

Federal officers have arrested eight U.S. Department of Agriculture inspectors and 13 officers associated with 13 wholesale produce companies on charges of bribery and corruption at New York's Hunt's Point Terminal Market.

"Operation Forbidden Fruit" was led by the USDA's Office of Inspector General assisted by FBI and USDA's Agricultural Marketing Service. The investigation observed a scheme over a three-year period where receivers allegedly were bribed to lower the grade of produce. The receiver then renegotiated a reduced price with the shipper. The inspectors then kicked back a percentage of the bribes to their supervisors.

The indictment allegations declare that inspectors routinely took cash payments of around $50 from the owners or employers of the wholesalers in exchange for agreeing to downgrade produce. According to the 65-count indictment, some inspectors have been taking bribes since 1980. It is alleged that some inspectors may have earned as much as $100,000 off-the-books.

The investigation stemmed from grower complaints over lower produce prices at Hunt's Point. Growers claimed they felt they were being cheated and wanted to end their association the New York produce market.

According to news sources, Jim Frazier of the USDA's Perishable Agricultural Commodities Act (PACA) branch said it appeared likely the actions at Hunt's Point violated the PACA, the law governing fair trading in fruits and vegetables.

Under PACA, the shippers could pursue claims against the receivers who bribed inspectors. If the inspectors are convicted, they could face a maximum sentence of 20 years in prison and fines up to $250,000.