Fraud is alive and well in the world of commerce, and in the fresh produce industry. But is it rising or falling?
“We’re seeing less of it here at our firm and hearing less of it from our clients,” says Mark A. Amendola, a litigation attorney with the firm of Martyn & Associates BB #:145864 in Cleveland, OH.
“So I have to conclude that fraud is on the decline, perhaps attributable to better monitoring and prevention systems in place. I think overall better awareness and better monitoring have prevented or caught some of the fraud that used to be rampant before.”
Additionally, Amendola says, “The USDA publishes on its PACA license website the number and amount of reparations complaints filed against a particular company. Also, even after the act is committed, the process servers I’m using can utilize better skip-trace techniques to find defendants that I sue.
“And, once found,” he continues, “this acts as a deterrent for future fraud. Finally, the USDA’s Office of Inspector General is handling and prosecuting more and more cases. So I really think all of this exposure has led to a decline.”
Not everyone agrees.
“As more and more business is conducted over the internet and not through traditional brick-and-mortar businesses, fraudulent business practices are most definitely on the rise,” says Richard Copelan, president and CEO of the Better Business Bureau serving Ventura, Santa Barbara, and San Luis Obispo counties in California.
As a result, he adds, “people are more suspicious of businesses than ever before.”
George Agorastos, sales manager for Arizona Sky Produce, Inc. BB #:269689 in Nogales, AZ, agrees with Copelan.
“There’s an increase in fraud across all business sectors, including ours. One prime example is a company that stiffed us for a few thousand after a PACA file out of Jersey. There were multiple listed offices (Jersey, California, Florida, etc.), they all went out of business, and in the next few weeks a new company contacted us with a new name listed in the same areas.
“Researching these two companies,” Agorastos says, “I found that the agent who formed them (a lawyer or paperwork jockey) [used] the same name and address for both. Instantly, I knew not to deal with them, but also I tipped the PACA agents, who were digging for more info on them.” Though he doesn’t know what came of it, he insists, “a quick Google [search] here and there can save you thousands.”
This is a multi-part feature adapted from a Credit & Finance article in the May/June 2020 issue of Produce Blueprints.
