Mississippi Man Pleads Guilty to Fraud Scheme Involving the Reselling of Food Products that were to be Destroyed
Producers Paid for Destruction, Instead Defendant Resold Goods to Discount Chains
A Belmont, Mississippi man who conspired with others to resell food products that were supposed to become animal feed or be used for agricultural purposes, pleaded guilty today in U.S. District Court in Seattle to conspiracy to transport property taken by fraud in interstate commerce, announced U.S. Attorney Annette L. Hayes. RANDY SPARKS, 60, admits he purchased various food and drink products from a middleman who had agreed to destroy the goods. SPARKS then resold the products from his own grocery outlet, Silver Dollar Sales, or sold them to other discount grocery chains. The investigation did not uncover any illnesses resulting from the sales. The Court will determine any restitution owed to the victims, up to an amount of $103,709 at the time of sentencing, currently set before U.S. District Judge Robert S. Lasnik on September 7, 2018.
According to records filed in the case, the scheme involved as many as 180 truckloads of food and beverage products from ten different food producers. The plea agreement details how SPARKS and a co-conspirator defrauded a Massachusetts-based company that arranged for the disposal and destruction of unsaleable food products. Specifically between July 2014 and October 2016, SPARKS and a co-conspirator represented that the commodities would be shipped to a South Dakota based business for destruction. The co-schemers produced fraudulent paperwork regarding the shipping and destruction of the goods. In fact, they were shipped to SPARKS who then sold them from his own grocery outlet or to other discount grocery chains.
The plea agreement describes how in May 2015, a juice producer in Selah, Washington, wanted 22 truckloads of apple juice destroyed because it did not meet their production standards. The producer arranged for the juice to be shipped to South Dakota to be recycled into animal feed. Instead, SPARKS shipped the juice through Seattle to Mississippi, and then sold it to outlets in Mississippi and California. The conspirators then presented the brokerage company with false documents about the destruction of the juice and the shipping history, which were ultimately provided to the manufacturer. The scheme was uncovered when some of the product was discovered on a store shelf in Maryland.
Approximately ten producers of food and beverage products had paid a combined $107,256 to have their products destroyed, which, in fact, were not destroyed, but instead resold to or by SPARKS.
The case was investigated by the Food and Drug Administration (FDA). The case is being prosecuted by Assistant United States Attorney Matthew Diggs.