U. S. Food and Drug Administration
Center for Food Safety and Applied Nutrition
FDA Prime Connection

FDA Consumer (01/01/95) - Orange Juice Scheme Gone Sour
 
 
FDA Consumer (01/01/95)
 
           Orange Juice Scheme Gone Sour
                by Paula Kurtzweil*
 
 
 
A scheme to produce and sell bogus orange juice concentrate via secret
rooms, hidden pipes, and deceptive record keeping has left two
Kentuckians with prison terms of more than six years each. These are the
longest sentences ever imposed for adulteration of orange juice.
 
Four other people also were sentenced, and two still await sentencing.
 
On Oct. 12, 1994, Judge John G. Heyburn of the U.S. District Court in
Louisville, Ky., sentenced Patsy J. Mays, former owner, director, and
secretary-treasurer of Sun Up Foods Inc. of Benton, Ky., to six years and
eight months in prison and imposed a $100,000 fine.
 
Her brother-in-law, Samuel W. Mays, former Sun Up vice president and
operations manager, received the same prison sentence. He was not fined.
 
At press time, James V. Mays--Patsy Mays' husband and the
acknowledged ringleader of the hoax--awaited sentencing scheduled for
Dec. 6, 1994. He is a former owner, director and president of Sun Up.
 
The previous May 6, James Mays, Patsy Mays and Samuel Mays were
convicted on one count of conspiracy and 20 counts of violating the
Federal Food, Drug, and Cosmetic Act. James Mays and Patsy Mays also
were found guilty of seven and five counts of mail fraud respectively.
 
The company had been substituting an inexpensive liquid beet sugar for
some of the more expensive orange juice concentrate, labeling the product
unsweetened orange juice concentrate, and selling it to manufacturers and
dairies for making juice for retail sales. According to documents obtained
by FDA, the scheme allowed Sun Up to increase its sales from almost
nothing in 1984--its second year of operation--to more than $57 million in
1989.
 
The extent of the conspiracy was discovered in an FDA investigation that
included more than 250 interviews with at least 150 former employees,
suppliers, builders, customers, and others who did business with Sun Up.
Investigators also reviewed an estimated 1 million paper and computer
documents seized by U.S. marshals with help from FDA. The marshals
also seized several objects, including an electric control panel that had
disguised an entryway, as evidence of Sun Up's efforts to carry out the
fraud in secrecy.
 
Also sentenced Oct. 12 were:
 
James Timothy Mays--son of James and Patsy Mays--Sun Up's vice
president of sales and marketing. He pleaded guilty to one count of
conspiracy and was sentenced to 20 months in prison.
 
Elizabeth Mays Murphy--the Mays' daughter--who, with her husband,
Stephen Murphy, owned Candy Base Co., a Sun Up sugar supplier. They
pleaded guilty to nine counts of Food, Drug, and Cosmetic Act violations
and were placed on probation for two years.
 
John Donald Langness, Sun Up's production and plant manager. He
pleaded guilty to one count of conspiracy and was placed on probation for
four years.
 
Frank Farmer, another Sun Up sugar supplier, pleaded guilty to one count
of adulteration of orange juice with intent to mislead and defraud. He was
fined $50 and sentenced to three years probation.
 
As part of the plea agreements, these five testified against James, Samuel
and Patsy Mays during a three-week trial.
 
Sun Up filed for bankruptcy in September 1990, under Chapter 11 of the
Federal Bankruptcy Act. It shut down in May 1992. The plant is now
under new ownership.
 
FDA first learned of possible illegal activities at Sun Up in the late 1980s,
when employees of Sun Up and other companies anonymously reported to
FDA that Sun Up was substituting sugar for orange juice concentrate and
marketing the product as an unsweetened orange juice product.
 
At that time, Sun Up operated a plant in Louisville, Ky. FDA inspections
of the plant found no evidence to support the complaints.
 
In late 1989, Sun Up moved its operations to a new facility in Benton,
Ky. In spring 1990, an East Coast customer of Sun Up recalled an entire
shipment of the product it had bought after laboratory analysis showed
contamination with beet sugar. FDA later learned that because of the
resulting publicity, Sun Up lost about 90 percent of its business in the first
60 days following the recall. As a result, the company had to lay off
employees and reduce salaries by almost half.
 
In December 1990, Leonard Farr, a compliance officer in FDA's
Cincinnati district office, attended a Florida Citrus Commission interview
of a former Sun Up employee.
 
In an affidavit, the employee indicated that at both its facilities, the
company had bought large amounts of sugar and had set up secret rooms
to hold tanks of liquid beet sugar. The employee also provided copies of
purchase records and names of people who would talk about Sun Up's
activities.
 
FDA immediately got a search warrant for the Benton facility. During the
search on Dec. 21, 1991, records were seized; however, FDA
investigators could not locate the secret room described by the informant.
 
During the next four months, FDA investigators conducted interviews and,
at one of them, learned the location of the secret room. After obtaining a
second search warrant on May 8, 1991, and accompanied by U.S.
marshals, FDA investigators again searched the facility. This time, they
found the hidden room. At FDA's request, U.S. marshals seized a 4-by-2
1/2-foot steel electric control panel, which disguised the only entry to the
room. Investigators also located stainless steel pipes hidden in the walls.
The pipeline was linked to the main processing area.
 
During searches in May and July 1991, FDA investigators
identified a similar setup in the abandoned plant. They had to
rebuild the pipe system to see if some discarded pipes found on the
plant's property fit into the secret setup. They did.
 
"I never saw anything as sophisticated as this," Farr said. "These pipes
were really well-hidden."
 
Farr said the pipes were set up to look like part of the sewage system, and
during a government inspection, the line carrying the sugar could be shut
off and the outside pipe closed to conceal the sugar line inside.
 
Additional evidence showed that Sun Up:
 
     ran its illegal activities from at least 1985 to late 1990 secretly
     received under cover of night up to 20 million pounds of beet sugar
 
     used Candy Base Co., of Louisville, Ky., and Murray, Ky., and
     Frank Farmer, in Jackson, Tenn., as fronts for buying sugar. Both
     billed Sun Up to make it look like they bought "orange
     concentrate" instead of sugar.
 
     cheated consumers out of $10 million to $20 million in fake orange
     juice.
 
FDA received no reports of deaths or illness from the "sugar-sweetened"
juice concentrate.
 
*Paula Kurtzweil is a member of FDAs public affairs staff.
 
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