Release No.: 160-15
WASHINGTON, Nov. 25, 2015 – The U.S. Department of Agriculture (USDA) has imposed sanctions on three produce businesses for failure to pay reparation awards issued under the Perishable Agricultural Commodities Act (PACA).
The following businesses and individuals are currently restricted from operating in the produce industry:
- New Farm Inc., operating out of Brooklyn, N.Y., for failing to pay a $45,614 award in favor of a Texas seller. As of the issuance date of the reparation order, Jong Hwa H. Kim was listed as the officer, director, and major stockholder of the business.
- Watermelons Inc., doing business as All Sweet Watermelons, operating out of Howell, N.J., for failing to pay a $143,560 award in favor of a California seller. As of the issuance date of the reparation order, Charles F. Pagano was listed as the officer, director, and major stockholder of the business.
- Farmers Fruit And Vegetable Company, operating out of Dallas, Texas, for failing to pay a $36,745 award in favor of a Texas seller. As of the issuance date of the reparation order, Carlos G. Guillen and Edgar A. Rodriguez were listed as the officers, directors, and/or major stockholders of the business.
PACA provides an administrative forum to handle disputes involving produce transactions; this may result in a reparation order being issued that requires damages to be paid by those not meeting their contractual obligations in buying and selling fresh and frozen fruits and vegetables. USDA is required to suspend the license or impose sanctions on an unlicensed business that fails to pay PACA reparations awarded against it as well as impose restrictions against those principals determined to be responsibly connected to the business when the order is issued. Those individuals, including sole proprietors, partners, members, managers, officers, directors, or major stockholders may not be employed by or affiliated with any PACA licensee without USDA-approval.
The Agricultural Marketing Service (AMS), PACA Division, regulates fair trading practices of produce businesses operating subject to PACA, which includes buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry. All oversight of actions related to PACA are conducted by AMS, an agency within USDA.
In the past three years, USDA resolved approximately 3,700 PACA claims involving more than $66 million. Our experts also assisted more than 7,100 callers with issues valued at approximately $100 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.
For more information, contact John Koller, Chief, Dispute Resolution Branch at (202) 720-2890, by fax at (202) 690-2815, or by email at PACAdispute@ams.usda.gov regarding this matter.
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