After FBI and IRS agents raided his Turlock home in August 2006 looking for evidence that he embezzled money from a former employer, Anthony Ray Manuel decided to steer them in another direction and gamble that the move would eventually earn him leniency.
He was then working at SK Foods L.P., one of California’s major processors and wholesalers of food products – primarily tomato paste – and owned by Frederick Scott Salyer, grandson of a storied San Joaquin Valley land baron.
Manuel suggested that the exploits at SK Foods made his theft of $975,000 from Woodland’s Morningstar Packing Co. look like jaywalking.
The assertion got the agents’ attention, and the information Manuel provided in the ensuing months touched off an investigation that led to an astounding series of successful prosecutions and one of the biggest scandals ever to hit the food industry.
The strategy paid big dividends for Manuel on Tuesday.
He was sentenced to two years of probation on his guilty plea more than five years ago to wire fraud and preparing a false federal income tax return for 2003.
Prosecutor Matt Segal convinced a reluctant U.S. District Judge Lawrence K. Karlton that the extent of Manuel’s assistance should spare the 61-year-old a prison term.
“With decades of law enforcement experience among us,” Segal wrote in a letter to Karlton on behalf of prosecutors and agents, “not one of us can recall working with a white collar cooperator whose assistance to law enforcement was more significant.
“He gave the government a view into SK Foods, a racketeering organization whose business was ongoing and corrupt in every significant aspect.
“Future Anthony Manuels should see that extraordinary cooperation can be extraordinarily rewarded.”
Telling Segal “you are wearing me down,” Karlton acknowledged the unusual scope of Manuel’s assistance but, at the same time, he said he considers the embezzlement “very serious.”
While a sentence of probation is “not completely satisfactory, it is probably appropriate under the circumstances,” the judge conceded.
No restitution was ordered because Manuel already has retired his debt to Morningstar.
Manuel provided agents with documents to which he had access, and he wore a body recorder as he went about his duties at SK Foods. The fruits of that device included discussions with Salyer and other SK Foods executives in corporate meetings at the company’s headquarters in Monterey and elsewhere.
The information implicated senior management in bribery, antitrust violations, and the knowing shipment of millions of pounds of adulterated and mislabeled food.
Manuel made recorded telephone calls to Randall Rahal, a New Jersey food broker and architect of a scheme to bribe purchasing managers buying SK Foods products for their companies at inflated prices. Excerpts culled from those conversations enabled agents to get court authorization for wiretaps that yielded additional evidence.
As a result of the information and evidence Manuel provided and the investigation that it spawned, 10 people – five key employees of SK Foods, purchasing managers at four customer companies, and Rahal – were charged and pleaded guilty in the face of overwhelming evidence.
“It cannot be emphasized enough that not one of these individuals could have been prosecuted without the information that Mr. Manuel provided,” Segal wrote in his letter to Karlton.
Salyer, 58, pleaded guilty in 2012 to racketeering and price fixing. He is serving a six-year prison sentence.
SK Foods was sold out of bankruptcy and no longer exists.