Tag Archives: food fraud

Trust: Head of America’s largest organic food fraud scheme sentenced to 10 years

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For years I’ve told my five daughters the same thing: when someone says “trust me” walk – no run – away. Trust is earned.

And there’s far too much faith-based food safety.

A judge on Friday sentenced the mastermind of the largest known organic food fraud scheme in U.S. history to 10 years in prison, saying he cheated thousands of customers into buying products they didn’t want.

Ryan Foley of Global News cited U.S. District Judge C.J. Williams as saying Randy Constant orchestrated a massive fraud that did “extreme and incalculable damage” to consumers and shook public confidence in the nation’s organic food industry.

Williams said that, between 2010 and 2017, consumers nationwide were fooled into paying extra to buy products ranging from eggs to steak that they believed were better for the environment and their own health. Instead, they unwittingly purchased food that relied on farming practices, including the use of chemical pesticides to grow crops, that they opposed.

“Thousands upon thousands of consumers paid for products they did not get and paid for products they did not want,” Williams said. “This has caused incalculable damage to the confidence the American public has in organic products.”

Williams said the scam harmed other organic farmers who were playing by the rules but could not compete with the low prices offered by Constant’s Iowa-based grain brokerage, and middlemen who unknowingly purchased and marketed tainted organic grain.

Williams ordered Constant, a 60-year-old farmer and former school board president from Chillicothe, Missouri, to serve 122 months in federal prison, as his wife and other relatives sobbed.

Earlier in the day, Williams gave shorter prison terms to three Overton, Nebraska, farmers whom Constant recruited to join the scheme. Williams described the three as largely law-abiding citizens, including one “legitimate war hero,” who succumbed to greed when Constant gave them the opportunity.

Michael Potter, 41, was ordered to serve 24 months behind bars; James Brennan, 41, was sentenced to 20 months; and his father, 71-year-old Tom Brennan, was given a three-month sentence. Williams said the shorter sentence for the elder Brennan reflected his heroism as a decorated platoon leader in the Vietnam War.

All four farmers sentenced Friday had pleaded guilty to wire fraud charges and co-operated with a two-year investigation that isn’t over. A fifth farmer has also pleaded guilty in the case and is awaiting sentencing.

The farmers grew traditional corn and soybeans, mixed them with a small amount of certified organic grains, and falsely marketed them all as certified organic by the U.S. Department of Agriculture. Most of the grains were sold as animal feed to companies that marketed organic meat and meat products.

The farmers reaped more than $120 million in proceeds from sales of the tainted grain. The scheme may have involved up to 7 per cent of organic corn grown in the U.S. in 2016 and 8 per cent of the organic soybeans, prosecutors said.

Assistant U.S. Attorney Jacob Schunk said that under the scheme, consumers paid at least $250 million for fraudulent organic products _ and perhaps $1 billion or more. He said that Constant for years exploited an organic certification system that relies on the honesty of farmers and private certifiers.

“He saw the weakness in the system and he exploited it over and over again,” Schunk said.

Constant said that he took full responsibility for his crime and he apologized to his family and the grain merchants, farmers, ranchers and consumers whom he ripped off.

“The organic industry in this country is built in trust and I violated that trust,” he said.

European Union takes a stand against food fraud

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Anadolu Agency reports

The European Union said it will take more measures against food fraud cases after a contaminated eggs scandal touched 24 out of 28 member states this year.
“Misdoings and fraudulent practices of a few should not have such devastating effects,” EU Commissioner Vytenis Andriukaitis said in a statement after the high-level meeting in Brussels.
The commissioner said the bloc will improve “risk communication” between the member states to make sure the general public learns about such incidents in a “more coherent and swift way.”
He warned that a lack of transparency could “eventually lead to destruction of trust in particular [of the] food industry,” Andriukaitis added. The European Commission is planning to present more proposals to an upcoming the Council of the EU meeting on Oct. 9-10. The measures include creating common risk assessment on incidents, stretching the rapid alert system for food and holding training and regular crisis exercises. The origin of the egg contamination was detected in poultry in the Netherlands and has led to the closure of 200 farms in the country. Since July 20, millions of eggs have been destroyed or taken off supermarket shelves across Europe amid fears they had been contaminated with fipronil, used in insecticide

Food fraud in Canada

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I love Canada except for the ridiculous sub-zero temperatures we get here in the winter-Powell and Chapman can attest to this having lived in Ontario.
Canada is not immune to food fraud and with increase testing of food products, we’ll see just how bad it is. A study conducted by Sylvain Charlebois, the dean of the Faculty of Management and professor in food distribution and policy at Dalhousie University indicates that more than 40 per cent of Canadians believe to have been victims of food fraud already.

Earth provides enough to satisfy every man’s needs, but not every man’s greed. – Mahatma Gandhi

Liam Casey of the Globe and Mail writes

A federally funded study has found that 20 per cent of sausages sampled from grocery stores across Canada contained meats that weren’t on the label.
The study, published this week in the journal Food Control, was conducted by researchers at the University of Guelph and commissioned by the Canadian Food Inspection Agency.
It examined 100 sausages that were labelled as containing just one ingredient – beef, pork, chicken or turkey.
“About one in five of the sausages we tested had some off-label ingredients in them, which is alarming,” said Robert Hanner, lead author of the study and an associate professor with the Biodiversity Institute of Ontario at the University of Guelph.
The CFIA reached out to Prof. Hanner for the study after the European horse meat scandal in 2013, where food labelled as beef was found to have horse meat – in some cases beef was completely substituted by horse meat.
The goal of the study, the federal food regulator said, was to examine scientific methods used by Prof. Hanner to see if the CFIA could use them in its regulatory practices. The scientific tools showed promising results, the CFIA said.
Seven of 27 beef sausages examined in the study contained pork. One of 38 supposedly pure pork sausages contained horse meat. Of 20 chicken sausages, four also contained turkey and one also had beef. Five of the 15 turkey sausages studied contained no turkey at all – they were entirely chicken.
None of the sausages examined contained more than one other type of meat in addition to the meat the sausage was meant to contain, Prof. Hanner said, noting, however that researchers were only testing for turkey, chicken, pork, beef and horse.
“The good news is that typically beef sausages predominantly contain beef, but some of them also contain pork, so for our kosher and halal consumers, that is a bit disconcerting,” Prof. Hanner said.

The undeclared meats found weren’t trace levels, Prof. Hanner noted.
“The levels we’re seeing aren’t because the blades on a grinder aren’t perfectly clean,” he said, adding that many of the undeclared ingredients found in the sausages were recorded in the range of 1 per cent to 5 per cent.
More than one per cent of undeclared ingredients indicates a breakdown in food processing or intentional food fraud, Prof. Hanner explained.

Nothin’ new here: China reports 500,000 food safety violations in 9 months

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The Bangkok Post reports China, rocked in recent years by a series of food safety scandals, uncovered as many as half a million illegal food safety violations in the first three quarters of the year, an official has told lawmakers.

Chinese officials have unearthed a series of recent scandals, including rice contaminated with heavy metals, the use of recycled “gutter oil” in restaurants, as well as the sale of baby formula containing lethal amounts of the industrial chemical melamine in 2008.

Bi Jingquan, the head of the China Food and Drug Administration, told the Standing Committee of National People’s Congress on Friday that while significant progress had been made in the food sector, “deep-seated” problems remained.

Food fraud ‘Plastic rice’ seized in Nigeria

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Martin Patience of BBC News reports Nigeria has confiscated 2.5 tonnes of “plastic rice” smuggled into the country by unscrupulous businessmen, the customs service says.

plastic-riceLagos customs chief Haruna Mamudu said the fake rice was intended to be sold in markets during the festive season.

He said the rice was very sticky after it was boiled and “only God knows what would have happened” if people ate it.

It is not clear where the seized sacks came from but rice made from plastic pellets was found in China last year.

Rice is the most popular staple food in Nigeria.

The BBC’s Peter Okwoche says it is the only foodstuff that crosses cultural and ethnic lines across the country.

Whoever made this fake rice did an exceptionally good job – on first impression it would have fooled me. When I ran the grains through my fingers nothing felt out of the ordinary.

But when I smelt a handful of the “rice” there was a faint chemical odour. Customs officials say when they cooked up the rice it was too sticky – and it was then abundantly clear this was no ordinary batch.

They’ve sent a sample to the laboratories to determine exactly what the “rice” is made of.

They are also warning the public not to consume the mystery foodstuff as it could be dangerous.

Fake food scandals are thankfully rare in Nigeria when you compare it to countries such as China.

The big scandal here is fake pharmaceutical drugs that kill a huge number of people every year.

A total of 102 sacks, each containing 25kg (55lb), was seized.

Mr Mamudu did not explain how the plastic rice was made but said it had been branded as “Best Tomato Rice.”

Maybe they replaced it with pot: Australian suppliers caught selling oregano mixed with other leaves

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Before marijuana could be bought at a dispensary – Australia, you’re so behind the times on this, same-sex marriage and asylum seekers – would-be middle-school dealers would often pass off bags of oregano as weed.

oregano-marijuanaThose who smoked it got a headache: they did not get high.

A couple of Australian supermarkets were caught doing a similar bait and switch.

Food fraud.

Esther Han of the Canberra Times reports Aldi and supermarket supplier Menora have admitted to selling nearly 190,000 units of adulterated oregano products over a one-year period and have promised never – never ever double secret probation promise — to do it again.

The budget grocery chain and Menora have signed court enforceable undertakings with the Australian Competition and Consumer Commission, committing to conduct annual testing of the composition of their herb and spice products.

Aldi sold more than 126,800 units of its Stonemill oregano across its 400 stores in 2015, documents show. And 61,480 Menora-branded products were sold at Coles, Woolworths, IGA and other stores in NSW, Vic, WA and SA in the same year.

They claimed the products were 100 per cent dried oregano leaves, despite a “substantial presence of olive leaves”.

“This is extremely bad behaviour. I don’t think it’s in anybody’s head that you’re getting anything other than pure oregano and our message to retailers is: ‘Check the products you’re selling,” said ACCC chairman Rod Sims.

“The offer of refunds is there. If you take back the empty container you’ll get a refund, take back proof of purchase, you’ll get a refund.”

The undertakings follow an investigation by consumer group Choice, which in April said laboratory tests showed seven out of 12 popular oregano products were less than 50 per cent oregano leaves. They were instead bulked out with olive and sumac leaves.

The worst offender was Master of Spices, which was only 10 per cent oregano, followed by Hoyt’s, at 11 per cent, and Aldi’s Stonemill, at 26 per cent.

The test results showed Spice & Co and Menora’s products were only a third oregano, Spencers was 40 per cent and G Fresh was 50 per cent.

Choice spokesman Tom Godfrey said as dried oregano was a fixture in most kitchens across the country, the undertakings were a real win for Australian consumers.

“We need be able to trust what is written on the labels of the foods we purchase in our supermarkets,” he said.

Food fraud is a reoccuring problem; expired milk powder resold

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Substituting for cheaper, or expired inputs, or adding supplemental ingredients isn’t new in the food world. As long as there have been food, there has been food fraud.

Melamine in dog food, horse meat in beef lasagne or seagull meat mixed with other protein sources have all garnered attention and research. Food manufacturers in China, a huge and still growing food export market, have been fingered in multiple fraud cases. The latest incident, according to Stuff, centers around reselling expired milk powder.

Chinese police on Monday (NZT) arrested 19 people in Shanghai for selling about 300 tonnes of expired Fonterra milk powder, Shanghai Daily reported.

The suspects were allegedly managing a company, which was packaging expired products of the New Zealand dairy company – one of the most popular brands in China – into smaller packages for resale below market prices, according to media reports.

After a months-long investigation, the police discovered that one of the suspects sold the expired products to another company, who in turn allegedly resold almost 200 tonnes to distributors in Shanghai and in the Jiangsu, Henan and Qinghai provinces, who sold them on e-commerce platforms or in wholesale.

The authorities have seized 100 tonnes of these products and have shut down the websites selling them.

Fonterra spokeswoman Maree Wilson said on Monday night it supported the enforcement steps taken by Chinese officials.

“The Chinese authorities have acted strongly and swiftly to investigate and arrest the people they believe are responsible for this and we fully support their actions.
“Food safety is our top priority and we are committed to providing safe and high quality dairy products.

“We work actively with our direct customers to ensure the integrity of our products. This includes providing guidelines on how to manage expired product in a responsible way.

“In this case there appears to have been criminal activity much further along the supply chain.

“While we believe this is an isolated criminal incident, we are reviewing the case internally.”

Wilson said that, to Fonterra’s knowledge, the milk powder was not being resold with Fonterra packaging.

 

Food fraud Rudolph edition: Alaska restaurant labels New Zealand venison as native reindeer

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A popular restaurant has pleaded guilty to lying to its customers for two years.

In Fairbanks, Alaska, The Pump House Restaurant sold New Zealand venison under the guise of being Alaskan reindeer. 

rudolph-red-nosed-reindeer-7049705The restaurant’s parent company pleaded guilty to violating Alaska’s labelling and packaging laws in state court last week. 

The deception was noticed during an inspection in August last year. Food safety staff noticed a box that identified the meat was from New Zealand, not Alaska, said prosecutor Carole Holley with the Alaska Office of Special Prosecutions.

The business manager said the restaurant “deceptively served elk in lieu of reindeer ‘for about two years”.

Both the terms red deer and elk were used to describe the meat served under the name reindeer. Red deer and American elk are closely-related.

Fairbanks Daily News-Miner reported that the business would pay $50,000 in criminal fines, and will donate all profits from the dish to the Fairbanks Community Food Bank, The Salvation Army and Stone Soup Cafe – equating to $10,532. 

Food fraud: Perth company uncovers where food really comes from

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John Flint of PerthNow reports Indonesian prawns sold to consumers in Australia contained trace elements of cooling water from a nuclear power plant, forensic tests uncovered.

tsw.2Dr John Watling, chief scientist with TSW Analytical, was surprised by the discovery, but believes food fraud is commonplace.

Dr Watling, formerly Winthrop Professor of Forensic and Analytical Chemistry at the University of WA, estimates that one-third of what we put in our shopping trolleys isn’t what it claims to be.

“With the Indonesian prawns, some exhibited the elemental signature of having been grown in the cooling water from a nuclear power station,” Dr Watling told The Sunday Times this week. “As there isn’t a nuclear power station in Indonesia they obviously didn’t come from Indonesia.

“The prawns were not toxic — we’re not talking about prawns that glow in the dark. But their elemental fingerprint indicated that they were not grown where the label said they were.”

Food fraud is so lucrative that organised crime syndicates are now involved, TSW Analytical’s chief executive Cameron Scadding says.

Mr Scadding, also a forensic chemist, said the explosion in demand for healthy and ethically produced foods is also being exploited.

The booming industry around expensive organic produce is expected to exceed $US100 billion this year. It’s hardly a surprise then, Mr Scadding said, to see cheaply produced foods passed off as organic.

“Given the premium and the demand for this sort of food it is very open to economically motivated substitution as, after all, the organic carrot looks the same as the cheaper non-organic one,” he said.

It’s not just what we eat, but what we love to drink. Australian wines, for example, are ripe for rorting.

“There are some wines that haven’t even seen a vineyard. They’re just fabricated wines,” Dr. Watling said.

Dr Watling and Mr Scadding, who co-founded TSW Analytical 10 years ago, recently launched Source Certain International with Colorado-based Glenn McClelland, to lead the fightback against food fraud globally. From their WA base in Bibra Lake, they’ve established offices in Singapore and the US.

They use their technology, TSW Trace, to determine a unique trace elemental fingerprint from food samples to determine their origin.

tswDeveloped by Dr Watling over 30 years, it can pinpoint where in the world the ingredients come from.

The same technology has even been used, outside of food, to identify gold fraud. In 2010, WA Police hailed it as crucial in thwarting an international gold heist and credited Dr Watling with pioneering gold fingerprinting.

At the time, Dr Watling told The Sunday Times his technology had saved the global gold industry about $1 billion.

The food industry has even more to lose. Food scandals, such as the frozen berries hepatitis A scare last year, can decimate a business and destroy trust in an entire industry.

The fallout from the hepatitis A outbreak — involving 34 Australians, including two in WA — was felt by businesses in the frozen berries market, as shoppers stopped buying them.

Food fraud: Is that octopus in a can or squid

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Jonathan Stempel of Seafood News reports, a new lawsuit accuses Goya Foods Inc of cheating consumers by selling canned octopus products that actually contain cheaper, lower quality jumbo squid.

Goya canned octopus in garlic sauce“Independent DNA testing” confirmed that the largest Hispanic-owned U.S. food company made the switch, according to a complaint filed late Wednesday in the federal court in San Jose, California. The lawsuit seeks at least $5 million of damages.

Goya, based in Jersey City, New Jersey, did not immediately respond on Thursday to requests for comment.

The plaintiff Luis Diego Zapata Fonseca, of Salinas, California, sued on behalf of purchasers nationwide and in California of Goya canned octopus in garlic sauce, hot sauce, pickled sauce or olive oil.

According to the complaint, both fish have similar textures, making it hard for people to tell them apart, especially when they are bathed in sauce.

But while octopus prices have risen because of overfishing, jumbo squid are thriving, and they adapt easily to changing ocean conditions caused by global warming, the complaint said.