USDA restricts PACA violators in California from operating in the produce industry

WASHINGTON — The U.S. Department of Agriculture (USDA) has imposed sanctions on two 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:

tfontana Wholesale, operating out of Fontana, for failing to pay a $10,762 award in favor of a California seller. As of the issuance date of the reparation order, Rafael Flores was listed as the officer, director and major stockholder of the business.

tmpgwest LLC, operating out of La Quinta, for failing to pay a $293,949 award in favor of a California seller. As of the issuance date of the reparation order, William L. Penny was listed as a member 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 PACA Division, which is part of USDA’S Agricultural Marketing Service (AMS), 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 3,500 PACA claims involving more than $58 million.