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USDA cites Illinois company for PACA violations

WASHINGTON, Oct. 23, 2020 – The U.S. Department of Agriculture (USDA) has imposed sanctions on National Produce Sales Inc. (NPS), Lake Zurich, Ill., for violating the Perishable Agricultural Commodities Act (PACA). These sanctions include barring the business and the principal operators of the business from engaging in PACA-licensed business or other activities without approval from USDA.

NPS failed to pay $820,456 to seven sellers for produce that was purchased, received and accepted in interstate and foreign commerce from January 2016 to February 2018. This is in violation of the PACA. NPS cannot operate in the produce industry until Oct. 21, 2022, and then only after they apply for and are issued a new PACA license by USDA.

The company’s principals, Michael Hughes and David El-Aboudi, may not be employed by or affiliated with any PACA licensee until Oct. 21, 2021, and then only with the posting of a USDA approved surety bond.

USDA is required to publish the finding that a business has committed willful, repeated and flagrant violations of PACA as well as impose restrictions against those principals determined to be responsibly connected to the business during the violation period. 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.

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.

For further information, contact Corey Elliott, Chief, Investigative Enforcement Branch, at (202) 720-6873 or PACAInvestigations@usda.gov.

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, dealers and brokers within the fruit and vegetable industry. In the past three years, USDA resolved approximately 3,625 PACA claims involving more than $104 million. PACA staff also assisted more than 7,600 callers with issues valued at approximately $166 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.