The U.S. Department of Agriculture has filed an administrative action against bankrupt Maxsun Produce Corp., alleging the company failed to pay 23 produce sellers more than $1 million under the Perishable Agricultural Commodities Act.
The PACA action against the Maspeth, N.Y., company comes a year after the USDA imposed sanctions against it for failing to pay a Georgia supplier $9,066. The USDA notices name Thomas Qi as the principal for Maxsun. The 2013 sanction banned Maxsun from operating in the produce industry.
The $1million allegedly owed to 23 sellers, according to the Jan. 22 notice from USDA, was for produce sold from January 2012 through October 2012.
Maxsun filed for Chapter 7 bankruptcy liquidation in May 2013, listing assets of $50,000 or less and unsecured claims of $3.6 million. The bankruptcy petition stated Maxsun had between 100 and 199 creditors.
Other recent PACA actions by USDA include:
- An administrative action against Big Bear Storage and Packing Inc. The Pompano Beach, Fla.-based company allegedly failed to make payment to 31 produce sellers in the amount of $1.24 million from December 2011 through June 2013, according to USDA. The company can request a hearing. If USDA finds that Big Bear committed repeated and flagrant violations, it would be barred from the produce industry for two years. Also, its principals could not be employed by or affiliated with any PACA licensee for one year and then only with the posting of a USDA-approved surety bond.
- Sanctions against National Food Products Inc., Laredo, Texas, for failing to pay a $9,854award in favor of a Texas seller. Josefina J. Garcia is listed as the sole officer, director, and major stockholder of the business. Both the company and Garcia are restricted from operating in the produce industry.
- Sanctions against T J Produce Inc., Joliet, Ill., for failing to pay a $37,068 award in favor of a Texas seller. Thomas J. Hanyzewski and Jerome M. Lamm are listed as the officers, directors, and/or major stockholders of the business. The officers and the company are restricted from operating in the produce industry.
USDA is required to suspend the license or impose sanction 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, according to the agency’s website.
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.