Aug 27, 2009

SACRAMENTO, Calif.: United States Attorney Lawrence G. Brown announced that JEFFREY SHERMAN BEASLEY, 63, of Lockeford, Calif., pleaded guilty today in U.S. District Court in Sacramento to one count of participating in a conspiracy to deprive the customers of SK Foods of the honest services of some of their employees, and to cause the introduction and delivery for introduction of misbranded tomato paste into interstate commerce with the intent to defraud and mislead. BEASLEY was a vice president for Monterey-based SK Foods LP. As part of his plea agreement, BEASLEY has agreed to cooperate in the governments ongoing investigation.

The case is the product of a joint and extensive investigation by the Federal Bureau of Investigation, the Internal Revenue Service, Criminal Investigation, and the United States Department of Justices Antitrust Division.

According to Assistant United States Attorneys Benjamin B. Wagner, Sean C. Flynn and Anne E. Pings, who are prosecuting the case together with Barbara Nelson, Richard Cohen and Lara Kroop of the San Francisco Field Office of the Antitrust Division, BEASLEY admitted in his plea that between January 2004 and April 2008, he along with certain other leaders, employees, and associates of SK Foods engaged in a scheme to defraud and deprive certain of SK Foods customers of their respective rights to the honest services of certain of their own employees.

BEASLEY and his co-conspirators did this through acts of bribery that were intended to ensure that those customers, including Kraft Foods Inc., Frito-Lay Inc., and B&G Foods Inc., purchased processed tomato products from SK Foods rather than from its competitors, and that those customers paid an inflated price for such products. The bribes also induced customer purchasing agents to disclose to SK Foods the bidding and other proprietary information of certain of its competitors. They used the proprietary information to set prices, often higher than they would have otherwise.

BEASLEY also admitted that he and other senior leaders of SK Foods routinely falsified, and directed other SK Foods employees to falsify, the various grading factors and data contained on Certificates of Analysis and other quality control documents that accompanied customer bound shipments of tomato product that was produced, purchased and sold by SK Foods. These falsifications were undertaken in order to make it appear to customers as if the tomato product they were receiving from SK Foods was in compliance with contractual specifications when, in fact, it was not.

BEASLEY is the seventh person to plead guilty to federal offenses as a result of the ongoing investigation. Sentencing before Judge Karlton was set for January 12, 2010. The maximum statutory penalty on the conspiracy charges is five years in prison, and a criminal fine of $250,000. However, the actual sentence will be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and will be imposed at the discretion of the court.