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Turlock informant on SK Foods scandal gets probation

The Turlock man that was the key witness in a federal probe that resulted in the shuttering of one of the largest tomato processors in the state was given probation for his own embezzlement charges.

Anthony Ray Manual, 61, was sentenced to two years federal probation for wire fraud and filing a false tax return on Tuesday at the Sacramento federal courthouse. He pled guilty to the charges in 2009.

The U.S. Attorney’s Office advocated for leniency for Manuel because his information and cooperation led to a massive case of corruption uncovered in the food industry.

Manuel first came under suspicion by the Federal Bureau of Investigations when allegations arose he embezzled approximately $975,000 from Morningstar Packing Co., where he worked as a sales representative in 2003.

In 2006 federal agents executed a search warrant at Manuel’s Turlock home and it wasn’t long after that he admitted the embezzlement and started detailing the corruption present at SK Foods, where he was employed at the time.

In 2007 and 2008, Manuel recorded conversations with SK Foods executives, including Scott Salyer the company’s chief executive officer and grandson of the founder. Manuel als0 provided documents corroborating his account of the crimes being committed at SK Foods.

Salyer later admitted that he operated SK Foods as a racketeering organization. According to his plea agreement, from January 2004 to April 2008, Salyer encouraged food broker Randall Rahal to pay bribes and kickbacks to purchasing officers employed by SK Foods’ customers Kraft Foods, Frito-Lay, and B&G Foods. The intent was to induce Kraft’s Robert Watson, Frito-Lay’s Richard Wahl, and B&G’s Robert Turner to promote the interests of SK Foods over their employers’ interests, the Department of Justice reported.

Salyer also admitted that at his direction, SK Foods routinely falsified the lab test results for its tomato paste. Salyer ordered former employees Alan Huey and Jennifer Dahlman to falsify tomato paste grading factors, and SK Foods lied about its product’s percentage of natural tomato soluble solids, mold count, production date, and whether the tomato paste qualified as “organic.”

Finally, Salyer admitted that he had discussed an illegal target price agreement with other sellers of tomato paste and, when another co-conspirator offered a lower price, Salyer got the co-conspirator to agree to withdraw that offer to a customer, according to the DOJ.

Wiretaps of Rahal’s telephones revealed that Rahal was discussing bribery and food mislabeling with Salyer and other senior officers of SK Foods. The wiretap also confirmed that Rahal was bribing Watson, Wahl, Turner, and Safeway employee Michael Chavez. On April 18, 2008, federal agents from the different agencies involved in the investigation executed search warrants at the offices of SK Foods and at Salyer’s residence in Pebble Beach, seizing documents and copying SK Foods’ computer servers.

In 2009, the bribe recipients and many of Salyer’s subordinates at SK Foods pleaded guilty. Also that year, creditors forced SK Foods into bankruptcy.