USDA cites Southern Produce Distributors Inc. in North Carolina for PACA violations

The U.S. Department of Agriculture (USDA) has imposed sanctions on Southern Produce Distributors Inc. (SPD), Faison, N.C., for violating the Perishable Agricultural Commodities Act (PACA).

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

SPD failed to pay $3,488,367 to 33 sellers for produce that was purchased, received and accepted in interstate and foreign commerce from April 2017 to June 2018. This is in violation of the PACA. SPD cannot operate in the produce industry until June 25, 2023, and then only after they apply for and are issued a new PACA license by USDA.

The company’s principal, Kelley Precythe, may not be employed by or affiliated with any PACA licensee until June 25, 2022, and then only with the posting of a USDA approved surety bond. The company’s other principal, Sterling Cook, has challenged his responsibly connected status.

USDA is required to publish the finding that a business has committed willful, repeated and flagrant violations of PACA as well as impose restrictions against those principals determined to be responsibly connected to the business during the violation period. 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.
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.

For further information, contact Corey Elliott, Chief, Investigative Enforcement Branch, at (202) 720-6873 or PACAInvestigations@usda.gov.