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Tyson Agrees to Penalty in Mexico Inspection Case

Tyson Foods Inc.–one of the world’s largest processors and marketers of chicken, beef and pork products–agreed to pay a $4 million criminal penalty to resolve an investigation into improper payments by company representatives to government-employed inspection veterinarians in Mexico.

The announcement was made Thursday by Assistant Attorney General Lanny Breuer of the Criminal Division and James McJunkin, Assistant Director in Charge of the FBI’s Washington Field Office.

“Tyson Foods used false books and sham jobs to hide bribe payments made to publicly-employed meat processing plant inspectors in Mexico,” said Assistant Attorney General Breuer in a prepared statement. “The penalty and resolution announced today reflect the company’s disclosure of this conduct, its cooperation with the government’s investigation and its commitment to implementing enhanced controls.”

The statement from the U.S. Department of Justice Office of Public Affairs continues:

“A criminal information filed in U.S. District Court in the District of Columbia in connection with a deferred prosecution agreement charges Tyson with conspiracy to violate the Foreign Corrupt Practices Act (FCPA) and with violating the FCPA. Tyson, which is headquartered in Springdale, Ark., produces prepared food products. As part of a deferred prosecution agreement with the department, Tyson acknowledged responsibility for the actions of its subsidiaries, employees and agents who made improper payments to government-employed veterinarians who inspected two of its chicken processing plants in Gomez Palacio, Mexico.

Any company that exports meat products from Mexico must participate in an inspection program, supervised by the Mexican Department of Agriculture. According to court documents, the inspection program at each facility is supervised by an on-site veterinarian employed by the government of Mexico to ensure that all exports conform to Mexican health and safety laws.

According to documents filed in court, Tyson’s Mexican subsidiary, Tyson de Mexico, paid approximately $90,000 between 2004 and 2006, to two publicly-employed veterinarians who inspected its Mexican plants, resulting in profits of approximately $880,000.

The payments were made both directly to the veterinarians and indirectly through their wives, who Tyson de Mexico listed on its payroll, although neither performed any services for Tyson. According to court documents, the bribe payments were made to keep the veterinarians from disrupting the operations of the meat-production facilities. When payments to the spouses were terminated in 2004, Tyson representatives agreed to increase the amount paid to the veterinarians to match the amount previously paid to their spouses.

The agreement requires that Tyson pay a $4 million penalty, implement rigorous internal controls, and cooperate fully with the department. The agreement recognizes Tyson’s voluntary disclosure and thorough self-investigation of the underlying conduct. If Tyson abides by the terms of the agreement for the two-year term, the department will dismiss the criminal information.

In a related matter, Tyson reached a settlement today with the U.S. Securities and Exchange Commission, under which it agreed to pay more than $1.2 million in disgorgement of profits, including pre-judgment interest.

This case is being prosecuted by Trial Attorney Kathleen M Hamann of the Criminal Division’s Fraud Section and investigated by the FBI’s Washington Field Office.”

© Food Safety News
  • http://www.healthyfoodcoalition.org hhamil

    And not a single person is being charged with a criminal offense; thus, only fines will be paid–a manageable cost of business.
    An individual person authorized those payments and the doctoring of the books. That person broke the law; Tyson’s violation was upholding his/her/their decisions.
    Over 30 years ago, the parent company (Anderson Clayton) of my employer quit importing coffee beans from Africa because it knew that doing so would require it to, at least, close its eyes to violations of federal laws. Ironically, it had gotten in trouble for earlier paying a bribe to get a piece of safety equipment into Mexico.

  • http://www.healthyfoodcoalition.org Harry Hamil

    And not a single person is being charged with a criminal offense; thus, only fines will be paid–a manageable cost of business.
    An individual person authorized those payments and the doctoring of the books. That person broke the law; Tyson’s violation was upholding his/her/their decisions.
    Over 30 years ago, the parent company (Anderson Clayton) of my employer quit importing coffee beans from Africa because it knew that doing so would require it to, at least, close its eyes to violations of federal laws. Ironically, it had gotten in trouble for earlier paying a bribe to get a piece of safety equipment into Mexico.

  • Tom

    Tyson is no virgin when it comes to felonies. Felonies don’t stop them.
    They were convicted of bribing the Sec. of Agriculture but got a presidential pardon. They spent $425,000 on lobbying to former Senator Trent Lott’s lobbying firm. Lot was majority leader in the Senate but left to be able to lobby Congress. He was implicated in his own judge bribery scandal with his brother in law who was handling Trent Lott’s case.
    The total fine for Tyson on the bribery scandal was less than one half of one percent of reported sales in that division alone. The fine and getting out of criminal prosecution of the people actually committing the crimes will only allow others to be safely complicit in similar crimes in the future. The penalty was a hall pass compared to sales that were reported by that division alone.
    If we want to make white collar criminals and corporations follow the law, the fines and penalties have to be greater than the profits generated and they have to hold the people who did it accountable.
    These fines did not do that.
    Allowing them to report their own profits and using that as a standard for penalties is a bit like allowing drug dealers to come up with their own penalties based on the quality of the high from their last hit.
    They make a mockery out of our federal judicial system, our regulatory agencies, and the rule of law.