By Ropp, Kevin L.
FDA Consumer , Vol. 27, No. 8
A Sparta, Mich., orange juice manufacturing firm and its president were fined more than a half million dollars for selling orange juice labeled "unsweetened" because they substituted beet sugar for juice concentrate.
District Judge David McKeague, of the U.S. District Court's Western District of Michigan, fined Apple Valley International, Inc., $480,600 on May 17, 1993, on three felony charges for the interstate shipment of adulterated frozen unsweetened orange juice. Company president Mark Saur was fined $100,225 on May 2 by District Magistrate Joseph Scoville, of the same court, for three misdemeanor charges of adulterating frozen unsweetened orange juice concentrate.
"It was economic fraud," says Judith Putz, a compliance officer in FDA's Detroit district.
Invert beet sugar is chemically similar to the natural sugars--glucose, fructose and sucrose--found in orange juice. By substituting the invert beet sugar, which Apple Valley purchased for less than 29 cents per pound, for the more expensive orange juice concentrate, the firm saved approximately $1 per pound for every pound of concentrate replaced. The substitution saved Apple Valley more than $2 million from 1986 through 1988.
Apple Valley sold the orange juice primarily in the Midwest in 12-ounce and 16-ounce cans under various labels, including Valu Time, Mega, and Old Orchard.
FDA's Detroit district office was notified by its Grand Rapids, Mich., resident post that on July 26, 1990, agency officials received information from trade sources that indicated the firm was adulterating its fruit juice.
As a result, Jim Mundo, an investigator from FDA's Saginaw, Mich., resident post, and Scott Barlow, an inspector from the Grand Rapids post, inspected the firm from Aug. 14 through Sept. 1, 1990.
"No adulterants were found at the firm during their inspection, but then they pursued several other leads," Putz says. "On Aug. 23, 1990, they challenged Mark Saur, the company president, saying we thought there was adulteration going on, and he confessed."
In evaluating the company's records, FDA officials determined that adulterated orange juice had been shipped on March 22, 23, and 29, 1988, to firms in Brookfield, Appleton, and La Crosse, Wis.
In addition, Mundo and Barlow determined that approximately 475,000 cases--million 11.4 cans--of adulterated orange juice had been shipped between 1986 and 1988.
Over the next three years, FDA investigated who was responsible for the violation, how much of the product was involved, and how long the illegal activity continued.
According to FDA attorney Arlene Reidy, "We pursued many other leads, hoping to broaden the investigation. FDA interviewed many people, both at Apple Valley and from other companies.
"It was an elaborate investigation that extended to other juice suppliers and manufacturers," she says. Some of those additional investigations are continuing.
On April 1, 1993, assistant U.S. attorney Jeanine La Ville filed the charges against Mark Saur and Apple Valley in federal district court.
There have been no product seizures or recalls. Apple Valley still manufactures a variety of fruit juices, including orange juice. FDA plans to continue routine inspections of the firm.
About every six weeks, a vice president of Rich Products Corporation took three or four employees to a secret room in the basement of the firm's corporate office building to blend counterfeit Woodstone Gold, the caller told FDA.
That anonymous tip led to a stipulation and settlement agreement with the New York State Department of Agriculture and Markets last February, in which the Buffalo, N.Y., firm acknowledged it distributed more than 400,000 cases of food products containing the milk derivative sodium caseinate without listing the ingredient on the label. In addition, the company agreed to pay the department $240,000. …