By David Mitchell, The Packer
A grand jury indictment accuses two officers of Fresh King Inc. and five others with ties to the Homestead, Fla.-based company of smuggling produce treated with banned pesticides into the U.S. from Guatemala.
Owner and president Denisse Serge, and her husband, vice president Peter Schnebly, are charged with smuggling, conspiracy and making false statements.
Alicia Valle, special counsel to the U.S. Attorney in Miami, said both defendants face up to 155 years in prison. Serge, Schnebly and Fresh King warehouse manager Rebecca Bazan voluntarily surrendered May 19 in U.S. Magistrate Court, Valle said.
Valle said bond was set for Serge and Schnebly at $100,000 and $75,000 for Bazan.
No trial date had been set as of May 19.
Bazan is charged with making false statements and obstruction of justice in the indictment handed down May 13 in U.S. District Court for the Southern District of Florida. She faces up to 20 years in prison.
Fresh King also is listed as a defendant in the indictment. The company, which is a grower-shipper of domestic produce and an importer, faces five years probation and fines, Valle said.
Valle declined to say how much money Fresh King made off snow peas and sugar snap peas smuggled into the country from 2000-04.
Schnebly is mentioned as an owner of the company in the indictment, but according to Red Book Credit Services, he sold his share of the business to his wife in 1995.
“On advice from counsel, we will not be commenting on the case,” Schnebly said. “As for Fresh King, everything is normal.”
Other defendants charged in the indictment:
Jose Eduardo Campos, a principal and marketing director for an unnamed Miami-based cold storage and logistics company, and
three representatives of unnamed Guatemalan grower-shippers: Fernando Farfan, Emilio Say and Gustavo Castaneda.
Valle said prosecutors will seek to extradite the three Guatemalan defendants. Farfan and Castaneda both face conspiracy and false statement charges and up to 35 and 25 years in prison, respectively. Say, however, faces conspiracy and smuggling charges and up to 125 years.
The Food and Drug Administration requires importers to demonstrate that snow peas and sugar snap peas from Guatemala don’t have high residues of methamidophos or chlorothalonil. One method is for the importer to provide random samples to a third-party lab for testing.
According to court documents, Fresh King and its associates conspired to submit samples from specific cases that contained untreated products, which were transported within shipments of products that had been treated with the banned pesticides.
The indictment alleges that on numerous occasions Fresh King’s samples failed tests despite the company’s efforts to avoid detection. The company’s products also failed random FDA tests on numerous occasions, according to court documents.
After a failed test, a company is given the option to re-export the product or destroy it.
The indictment says that Fresh King always chose to destroy product. However, the indictment alleges that by the time the company received test results it already would have distributed product to customers and would instead submit for destruction low-grade product kept on hand for the specific purpose of deceiving government officials.
After federal officers executed a search warrant at Fresh King in 2003, the company altered its scheme, according to the indictment. The company allegedly used three other importers, including Campos’ firm, to continue smuggling.
Valle declined to comment on those co-conspirators, who allegedly put their names on import paperwork for products actually destined for Fresh King.
Fresh King also is accused of skirting import regulations by reporting product as “intended for immediate export” and thus exempt from FDA detention and testing. The products, however, allegedly were distributed to unidentified U.S. customers.