By David Watts Barton and Karen Gullo, Bloomberg, Dec. 10, 2008
A New Jersey broker of processed tomato products agreed to plead guilty to price-fixing and racketeering charges and pay $600,000 for making kickbacks to customers and inflating prices, prosecutors said.
Randall Lee Rahal, 61, president of Intramark USA Inc., a New Jersey wholesaler of food ingredients, was charged today in federal court in Sacramento, California, with taking part in conspiracies to fix prices of tomato products, U.S. Attorney McGregor Scott said in a statement. Rahal was sales broker for SK Foods LP, a Monterey, California-based tomato grower and processor that Scott said was a “racketeering enterprise.”
“A large portion of the tomatoes used by food-product manufacturers nationwide are harvested and processed here in the Eastern District of California,” Scott said. “We must ensure that the tomato-processing industry is free of corruption, kickbacks, and illegal collusion.”
The charges against Rahal are the first in an investigation of price-fixing and antitrust violations in the processed tomato products business, according to the statement. Rahal, who oversaw contracts between SK Foods and its customers, routinely paid bribes to gain an advantage and raise prices and rigged bids for SK Foods from 2006 to 2008, Scott said.
Rahal will cooperate in the probe, Scott said. SK’s customers are food manufacturers, distributors and retailers.
Christopher Adams, Rahal’s lawyer, said his client has agreed to accept responsibility for his actions. Lisa Crist, a spokeswoman for SK Foods, didn’t immediately return a message seeking comment.
Rahal will plead guilty to racketeering, money laundering and antitrust charges, said Scott, the U.S. attorney for Sacramento. The maximum penalty for racketeering is 20 years in prison. The money-laundering and antitrust charges each have maximum sentences of 10 years. The plea agreement is subject to court approval.
The case is U.S. v Randall Rahal, 08-566, U.S. District Court, Central District of California (Sacramento).