WASHINGTON, DC - The U.S. Department of Agriculture (USDA) has imposed sanctions on four produce businesses operating out of Arizona and California. Under the rules of the Perishable Agricultural Commodities Act (PACA), these businesess were sanctioned for failing to meet their contractual obligations to the sellers of produce they purchased and failing to pay reparation awards totalling a cumulative $313,616.

Direct from the USDA Agricultural Marketing Service:

These sanctions include suspending the businesses’ PACA licenses and barring the principal operators of the businesses from engaging in PACA-licensed business or other activities without approval from USDA. 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.

The following businesses and individuals are currently restricted from operating in the produce industry:

• Lorex Produce LLC, operating out of Rio Rico, Ariz., for failing to pay a $48,826 award in favor of a Florida seller. As of the issuance date of the reparation order, Francisco Alejandro Lopez Rodriguez and Enok Aristiga Ayala were listed as members of the business.
• Arizona Lemons LLC, operating out of Phoenix Ariz., for failing to pay a $16,776 award in favor of a Minnesota seller. As of the issuance date of the reparation order, Martha E. Bombela and Jose R. Partida were listed as members of the business.
• Perfect Harvest Inc., operating out of Nogales, Ariz., for failing to pay a $243,240 award in favor of an Arizona seller. As of the issuance date of the reparation order, Jorge A. Mercado was listed as the officer, director and major stockholder of the business.
• Super HK HG LLC, doing business as Hong Kong Supermarket, operating out of Hawaiian Gardens, Calif., for failing to pay a $4,774 award in favor of a California seller. As of the issuance date of the reparation order, Myint J. Kyaw was listed as a member of the business.

PACA provides an administrative forum to handle disputes involving produce transactions; this may result in USDA’s issuance of a reparation order 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 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 3,500 PACA claims involving more than $58 million. PACA staff also assisted more than 7,800 callers with issues valued at approximately $148 million. These are just two examples of how USDA continues to support the fruit and vegetable industry.

For further information, contacts, and to read the press release in its entirety, please click the link here.

USDA's Agricultural Marketing Service