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Monday, Mar. 15, 2010

Tomato king sees empire fall

SK Foods exec sits in jail, facing 20 years in food industry scheme

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Scott Salyer could have taken the easy way.

He could have lived off the interest from one of California's largest farm fortunes, whiling away the days pursuing his passions of dove hunting and go-kart racing.

But that wasn't the Salyer way. Never has been.

Since his grandfather Clarence started the Salyer Land Co. in Corcoran in the 1920s, ambition and conflict have marked the family history.

The Salyers survived water wars and labor strife. They fought with rival farmers, government agencies and among themselves. By the time Clarence "Cockeye" Salyer died in 1974, the family controlled 100,000 acres in California.

And still that wasn't enough.

Maybe that is how Frederick Scott Salyer ended up in this mess, facing a possible 20 years in federal prison in what prosecutors describe as one of the most audacious food industry schemes ever, one apparently designed to corner the nation's market for processed tomato products.

The conspiracy drove up food prices for people nationwide who used certain ketchup, salsa, juice, paste and any of dozens of other tomato-based products, and introduced old and moldy tomatoes into grocery stores, prosecutors contend.

The government has more than half a dozen food industry executives lined up to testify to buttress its case.

The case includes Anthony Ray Manuel, 57, formerly of Morning Star Packing Co. in Turlock and then an SK Foods executive. He has pleaded guilty to wire fraud and filing false tax returns. He is cooperating with the FBI.

Salyer, whose attorney declined to allow him to be interviewed, has pleaded not guilty and plans to fight the charges.

From the time he earned his agribusiness degree at California Polytechnic State University, San Luis Obispo, in 1979, Salyer has worked in family ventures, creating companies, seeking out markets and building an international empire that, until its collapse last year, did more than $700 million in annual sales.

He took a farming operation that grew cotton and safflower and expanded into lettuce and tomatoes, shaping it into one of the industry's largest producers.

Today the 54-year-old Salyer sits in a seventh-floor cell at the Sacramento County main jail, denied bail because a federal magistrate judge has deemed him a flight risk.

"Scott's a tough guy, but he's had to really, really dig deep to hold up under this thing," said Bob Pruett, 53, a businessman and confidant who met Salyer 40 years ago on the go-kart circuit. "It's very difficult to see him in that situation."

Old friends cite generosity

People who have known him for decades say they cannot fathom how it came to this, how the ribald and sometimes racially charged conversations caught on electronic intercepts could have come from a man they say is generous to a fault and as down to earth as any of the farmworkers he employed.

The story has reverberated through the Monterey Peninsula since April 16, 2008, when more than 100 FBI and Internal Revenue Service agents raided Salyer's home and businesses as part of a probe begun in 2005.

Publicity about the investigation dried up customers and available credit. His SK Foods LP collapsed into bankruptcy in May, throwing people out of work and shocking residents of Carmel and Pebble Beach, where Salyer lived and was known as a benefactor who gave millions to charity and held lavish parties for his employees.

Calvin Carter, a Morgan Hill electronics executive, said that when he met Salyer in college, there was no clue to his background.