(Aug. 22) NEW YORK — After years of setbacks, a company driven out of business in the wake of the 1999 Operation Forbidden Fruit sting has scored a victory that could vindicate others implicated in the investigation.

As a result, some company officials whose operations were caught in the sting could avoid losing their licenses to deal produce under the Perishable Agricultural Commodities Act.

“It means the licensee is exonerated unless they had knowledge of the illegal activity,” said Paul Gentile, an attorney representing two companies implicated in the scandal.

In the first disciplinary hearing under Operation Forbidden Fruit, in which the U.S. Department of Agriculture brings disciplinary action against the licensee for violation of the PACA, James Hunt, an administrative judge for the USDA, ruled July 28 that now-defunct wholesaler Post & Taback could not be held responsible for bribes a company employee made to a USDA inspector.

“The judge held that in order to hold Post & Taback or any other licensee responsible, the owners would have to have known about it,” said Gentile, an attorney who represents Post & Taback, as well as Koam Produce Inc., another wholesale operation that was caught in the sting. “As you may know, the department brought the action on the premise that the owners are responsible for whatever your employees do.”

Congress got involved in the wake of the scandal, appropriating millions of dollars to revamp the inspection system.

Disciplinary actions could have forced closure of numerous companies that were involved in the bribery scandal.

“That would have a devastating effect, because you lessen the competition,” Gentile said. “It freezes prices; people get unemployed. The department’s position was very significant and very drastic. They were going to put every company out of business that had anything to do with Forbidden Fruit. Now, the bar has been raised to say you can only do that if the owners and principals had actual knowledge about what was going on.”

The USDA will fight the decision, the agency’s attorney, Andrew Stanton, said. The appeal is scheduled for Sept. 22. Stanton declined to comment further.

Post & Taback, the largest Hunts Point firm involved in the bribery scandal, in February 2001 closed its doors owing more than $4 million to produce suppliers.

The decision is not so much a victory as it is vindication, said Dana Taback, former owner of Post & Taback who is now a director of the vegetable division at Hunts Point wholesaler Joseph Fierman & Son Inc.

“That would make sense to me, since the Department of Agriculture is taking that position with their employees,” Taback said. “What’s fair is fair. Look, this whole thing cost me a business and just about everything I have.”

The USDA brings a disciplinary proceeding against each company involved in the case.

Matt McInerney, executive vice president of the Irvine, Calif.-based Western Growers, said that, based on an admittedly limited understanding of the ruling, the decision seems to run afoul of traditional practice.

“Generally, the overarching issue has historically been that, whether you are a grower, shipper, broker, wholesaler or retailer, if you have an employee, he or she is acting in the capacity of the agent on behalf of the principal, namely the PACA licensee,” McInerney said. “And if an employee is acting on your behalf and they are conducting activity that is not in compliance with the rules of PACA, it’s your guy, you’re responsible for him.”