A South San Francisco produce company and its principals are banned from doing business in the industry because of failure to pay more than half million dollars to produce suppliers.

The Agricultural Marketing Service of the U.S. Department of Agriculture issued the sanction against Action Produce Inc. on Dec. 28 citing the company’s failure to pay a dozen suppliers for 83 lots of fresh produce.

The AMS had filed an administrative action against the company Aug. 31 warning of possible sanctions and citing the same unpaid produce bills. A total of $543,195 was due to the 12 suppliers for produce provided to Action from February 2010 through November 2010, according to the AMS.

Action Produce cannot operate in the produce industry until Dec. 13, 2014, at which time it may reapply for a PACA license. The company’s principals, Jean Granato and Cesar Nevarez, may not be employed by or affiliated with any PACA licensee until Dec. 13 this year, and then only after posting a USDA-approved surety bond.

The company filed for a Chapter 7 bankruptcy liquidation in January 2011, but that case was closed in April 2011 with the designation “discharge not applicable.” In that bankruptcy filing the company’s total debts were estimated at $1.78 million. It reported $198,000 in assets at that time, with $180,000 of those assets logged as accounts receivable.