USDA Restricts PACA Violators in California, Illinois and Mississippi from Operating in the Produce Industry

USDA/AMS Press Release:

The U.S. Department of Agriculture (USDA) has imposed sanctions on three produce businesses for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).

The following businesses and individuals are currently restricted from operating in the produce industry:

• Sun Valley Enterprise Inc., operating out of Bakersfield, Calif., for failing to pay a $7,888 award in favor of a California seller. As of the issuance date of the reparation order, Gumecindo Ramirez, Rigoberto Sermeno and Everacdo Vargas were listed as the officers, directors and/or major stockholders of the business.

• Tab Distributors Inc., doing business as Chicago Mushroom & Produce Co., operating out of Carol Stream, Ill., for failing to pay a $60,517 award in favor of a Pennsylvania seller. As of the issuance date of the reparation order, Thomas E. Gentile, Anthony T. Gentile and Baloinder S. Grewal were listed as the officers, directors and/or major stockholders of the business.

• Magnolia Brand Produce Inc., operating out of Vardaman, Miss., for failing to pay a $145,210 award in favor of a Mississippi seller. As of the issuance date of the reparation order, Richard E. Bailey was listed as the officer, director and major stockholder of the business.

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. 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 part of USDA’s Agricultural Marketing Service (AMS), regulates fair trading practices of produce businesses that are operating subject to PACA includes buyers, sellers, commission merchants, dealers and brokers within the fruit and vegetable industry.

In the past three years, USDA resolved approximately 3,500 PACA claims involving more than $58 million. Our experts also assisted more than 8,000 callers with issues valued at approximately $140 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.

For more information, contact John Koller, Chief, Dispute Resolution Branch at (202) 720-2890, by fax at (202) 690-2815, or by email at PACAdispute@ams.usda.gov regarding this matter.

Contact Info: Nadine Wilkins, nadine.wilkins@ams.usda.gov, 202-720-8998

Release No.: 034-17