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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of Alabama

Thursday, May 29, 2014

Seventh Adams Produce Official Charged With Fraud

BIRMINGHAM – A federal grand jury today indicted the former chief operating officer of Adams Produce Company in connection with fraud at the bankrupt Birmingham distributor of fresh fruits and vegetables, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Richard D. Schwein Jr.

STEVEN CRAIG FINBERG, 45, of Texas, is the seventh Adams Produce official charged in relation to a scheme to defraud the federal government of several hundred thousand dollars by creating false invoices and purchase orders in connection with government contracts.

In April, a grand jury indicted JOHN STEVEN ALEXANDER, 50, of Mountain Brook, for conspiracy and wire fraud. Alexander is the company's former chief financial officer. Five other Adams Produce officials have pleaded guilty and been sentenced on charges related to the fraud scheme. Four of the men have been ordered, jointly, to pay $481,000 in restitution the government. Adams' former chief executive officer, Scott David Grinstead, was ordered to pay restitution to the bankruptcy estate of Adams Produce to benefit the company's employees, who were not fully paid when Adams closed abruptly in 2012.

Finberg is charged with conspiring to defraud the government with Alexander, Grinstead, and the four other defendants -- David Andrew Kirkland, director of purchasing, Michael John O'Brien, general manager at an Adams' distribution center in Pensacola, Fla., Stanley Joel Butler, an Adams' purchasing agent, and Christopher Alan Pfahl, a purchasing program specialist. Finberg also faces 32 counts of wire fraud in connection with the scheme.

The federal government, through the Defense Supply Center Philadelphia, was one of Adams’ customers. The supply center contracted with Adams Produce to provide fresh fruits and vegetables to military bases, public school systems, junior colleges and universities. Adams Produce entered into contracts with the government worth millions of dollars, according to court records. The price paid by the government depended, in large part, on the cost to Adams Produce to purchase fruits and vegetables.

According to the indictment, Finberg engaged in a scheme to create false records that reflected an inflated cost to Adams Produce for fruits and vegetables it purchased from a national distributor. The higher costs were then presented to the U.S. Government.

According to today's indictment, Finberg met with the other officers and employees of Adams' Produce in July 2011 and they discussed ways to increase the company's profit margins on government contracts, including conducting transactions designed to create fraudulent purchase orders.

Finberg also was included in an Aug. 1, 2011, e-mail exchange with other Adams' officials, including Kirkland, about naming a company being created within Adams Produce to keep track of the fraudulent transactions, according to the indictment. O'Brien "suggested naming the company 'dsf (Dave's slush fund)... gbm (guranteed bonus maker).'," the indictment charges.

The FBI investigated the case, which Assistant U.S. Attorney George A. Martin Jr. is prosecuting.

Updated March 19, 2015