WASHINGTON, DC - In its pursuit to uphold the Perishable Agricultural Commodities Act (PACA), the U.S. Department of Agriculture (USDA) has imposed sanctions on Southern Produce Distributors Inc. (SPD), in Faison, North Carolina. SPD has allegedly failed to pay $3,488,367 to 33 sellers for produce. Under the rules of the PACA, SPD will be sanctioned, barring the company and the principal operators from conducting PACA-licensed business or other activities without approval from the USDA.

Direct from the USDA Agricultural Marketing Service:

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 more information, and to read the press release in its entirety, click here.

USDA Agricultural Marketing Service