With a federal sentencing hearing still pending against a former employee of the company, the United States Department of Agriculture (USDA) has filed an administrative action under the Perishable Agricultural Commodities Act (PACA) against Andrews Farming, Inc. of Hillsville.
According to the USDA, the Hillsville company allegedly failed to make payment to 11 produce sellers in the amount of $513,226 from December 2014 through June 2015.
“Andrews Farming Inc. will have an opportunity to request a hearing. Should USDA find that the company committed repeated and flagrant violations, it would be barred from the produce industry for two years,” the USDA said in a press release dated Feb. 9. “Furthermore, its principals could not be employed by or affiliated with any PACA licensee for one year and then only with the posting of a USDA-approved surety bond.”
The USDA measure takes place at the same time a former accountant and bookkeeper of the company, Robert Donald Morgan III, awaits a sentencing hearing on March 2 at 10:30 a.m. in Abingdon before Judge James Jones. According to Brian McGinn, Public Affairs Specialist with the U.S. Attorney’s Office of the Western District of Virginia, Morgan pled guilty to one count of bank fraud and one count of willfully failing to collect, account for or pay taxes in September 2015.
At the time charges were filed against Morgan in April of 2015, an article from The Associated Press stated that an affidavit filed by a U.S. Secret Service agent claimed Morgan stole more than $66,000 from Andrews Farming Inc., which is located in the Carroll County Industrial Park in Hillsville.
“The affidavit says Morgan forged the company president’s name of business checks he made out to himself,” the 2015 AP article stated. “He also allegedly deposited a check from the company’s insurance carrier into his personal account.”
The investigation of the case was conducted by the United States Secret Service, the Virginia State Police, the Carroll County Sheriff’s Office and the United States Marshals Service.
Keith Andrews, owner and CEO of Andrews Farming Inc. and its sister company, ANDCO Logistics, Inc., declined to comment when contacted for this article. Both companies joined Carroll County officials Oct. 21, 2014 in announcing a plan to invest more than $5.6 million to expand their agricultural production, warehousing and distribution operation in Carroll County. The Virginia Economic Development Partnership worked with Carroll County, the Carroll County Industrial Development Authority, and Virginia’s aCorridor to help secure the project for Virginia. The Virginia Tobacco Indemnification and Community Revitalization Commission approved $225,000 in Tobacco Region Opportunity Funds for the project.
As part of the performance agreement with the Tobacco Commission and the Carroll County IDA, Andrews Farming and ANDCO Logistics moved their operations to the Carroll County Industrial Park in Hillsville. According to the agreement, the space is leased by the Carroll County IDA to Virginia Produce and subleased to Andrews Farming until April 30, 2018. Carroll County holds collateral, according to the performance agreement, of $266,494 from the company in the event the $225,000 Tobacco Commission funds cannot be repaid.
The Agricultural Marketing Service (AMS), PACA Division, regulates fair trading practices of produce companies operating subject to PACA, which includes buyers, sellers, commission merchants, dealers, and brokers within the fruit and vegetable industry. All oversight of actions related to PACA are conducted by AMS, an agency within USDA. PACA establishes a code of good business conduct for the produce industry. Under it, all interstate traders in fresh and frozen fruits and vegetables must be licensed by USDA. USDA is authorized to suspend or revoke a trader’s license for violating the act.
Allen Worrell can be reached at (276) 779-4062 or on Twitter@AWorrellTCN