As part of its efforts to enforce the Perishable Agricultural Commodities Act (PACA) and ensure fair trading practices within the U.S. produce industry, the Department of Agriculture (USDA) has imposed sanctions on four produce businesses for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards issued under the PACA. These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from USDA. By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
The following businesses and individuals are currently restricted from operating in the produce industry:
- Hector H. Gonzales, d/b/a Hugo Produce, operating out of Los Angeles, Calif., for failing to pay a $4,676 award in favor of a California seller. As of the issuance date of the reparation order, Hector H. Gonzales was listed as the sole proprietor of the business.
- Miami Growers Inc. BB #:153049, operating out of Jersey City, N.J., for failing to pay a $6,960 award in favor of a Hawaii seller. As of the issuance date of the reparation order, Kanti V. Patel was listed as the officer, director and major stockholder of the business.
- Texas Green Grove Produce LLC BB #:343213, operating out of McAllen, Texas, for failing to pay a $10,312 award in favor of a Texas seller. As of the issuance date of the reparation order, Luis F. Mejia was listed as a member of the business.
- CTA Inc., doing business as American Freeze Dry, operating out of Ferndale, Wash., for failing to pay a $114,609 award in favor of a Washington seller. As of the issuance date of the reparation order, Jonathan Tan, Gurprett S. Cheema and Jagit S. Aujia 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 USDA’s issuance of a reparation order 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 PACA Division, which is in the Fair Trade Practices Program in the Agricultural Marketing Service, regulates fair trading practices of produce businesses that are operating subject to PACA, including buyers, sellers, commission merchants, dealer and brokers within the fruit and vegetable industry.
In the past three years, USDA resolved approximately 3,350 PACA claims involving more than $63 million. PACA staff also assisted more than 8,000 callers with issues valued at approximately $156 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.
For more information regarding this matter, contact John Koller, Chief, Dispute Resolution Branch, at (202) 720-2890, by fax at (202) 690-2815, or by email at PACAdispute@usda.gov regarding this matter.
Release No.: 117-19