Former SK Foods owner Scott Salyer will remain in federal custody after a U.S. magistrate judge denied his request for bail during his first court appearance Feb. 5. 

Salyer appeared in New York federal court to face 20 felony charges a day after he was arrested at John F. Kennedy International Airport returning from London.

Former SK Foods owner denied bail

Lauren Horwood, spokeswoman for the U.S. Attorney’s Office in Sacramento, Calif., which is handling the case, said the judge denied Salyer’s request for bail because based on evidence presented by prosecutors, Salyer was planning “one of the most elaborate schemes to flee” that he had ever seen.

Malcolm Segal, Salyer’s attorney, was unavailable for comment.

Horwood said although Salyer was not fleeing at the time of his arrest he is considered a flight risk. Authorities say Salyer siphoned millions of dollars from the companies he owned to offshore accounts in the hopes of living in a country that would not allow the U.S. to extradite him.

Salyer’s Pebble Beach, Calif., home is also up for sale for $7 million, and prosecutors allege a former SK Foods executive and Salyer’s personal assistant, called “J.J.” in court documents, helped Salyer prepare to flee prosecution late last year by selling his personal belongings, looking for a Paris apartment, and paying 33,000 euros to London-based Pushon Ltd., which helps foreigners obtain employment and residency in the European Union.

Salyer is considered the most high-value person arrested in the course of the federal government’s lengthy investigation involving his company, SK Foods LP, Horwood said, and what prosecutors allege is a bribery scheme stretching back more than a decade.

Horwood said if an indictment is eventually filed against Salyer, it will first be reviewed by a grand jury to determine if there’s enough evidence to proceed to trial, though Salyer can waive his right to a grand jury.

“The next step might be for an indictment to be filed depending on how negotiations go,” Horwood said.

After Salyer’s court appearance, Horwood said, Salyer and the case will be transferred to Sacramento where further court proceedings will be handled.

A 65-page federal criminal complaint unsealed Feb. 4 reveals more details into the government’s case against Salyer and the initial allegations of bribery against SK Foods that prompted the FBI to take a closer look at Salyer and his businesses.

The federal investigation — conducted jointly between the FBI, Internal Revenue Service and the Food and Drug Administration — started in 2005 after the FBI was contacted by a private investigation firm retained by Morning Star Packing Co., Los Banos, Calif., a competitor of SK Foods.

According to court documents, Morning Star believed it was defrauded of $1 million by then SK Foods vice president Anthony Ray Manuel between 1997 and 2005.

Manuel agreed to help the FBI with its investigation into SK Foods through monitored phone calls and conservations with employees, according to court documents, if the FBI agreed to reconsider its charges against Manuel, who pled guilty to two felony counts and is awaiting sentencing.

According to court documents, through its investigation with Manuel, the FBI uncovered “widespread corporate fraud” directed by Salyer that included bribing purchasing managers and falsifying documents about product quality.

In 1993, Salyer also hired Randall Rahal to serve as a sales broker for SK Foods. Rahal, who pled guilty in 2008 to felony charges involving paying bribes to purchasing managers for SK Foods’ customers, also served on SK Foods’ board of directors as recently as 2008.

Moreover, Salyer is also alleged in court documents to have authorized the bribery schemes based on wiretapped phone conversations Salyer had with Rahal as late as April 2008, the same month FBI agents raided the company’s Monterey corporate offices. Prosecutors also allege in their complaint that falsification of food quality records regarding mold in SK Foods’ tomato products and other quality control documents was done at the “express instruction and director of” Salyer himself.

Evidence alleging Salyer’s crimes was gathered based on statements made by five former SK Foods employees many of whom pled guilty in the past year to various criminal charges.