Former Wholesale Grocery VP Busted for Using Untreated Wood Pallets

Michael Sayklay, the former vice president of Economy Cash & Carry Inc., a Texas-based grocery wholesaler, pleaded guilty Jan. 8 in federal court in El Paso, Texas, to a criminal violation of the Plant Protection Act, the Justice Department and the Department of Agriculture announced.

Sayklay pleaded guilty to one felony charge for falsifying stamps that certified that wood pallets were heat-treated to prevent infestation and were suitable for use in international transportation. Sayklay had the false stamp affixed to Economy Cash & Carry wood pallets that were used to carry products back and forth across the U.S.-Mexican border. The offense took place in March 2006. Sayklay no longer works for the company.

As part of the plea agreement, Sayklay agreed to pay a fine of $8,000 dollars and serve a term of probation.

The Department of Agriculture requires the heat treatment of wood pallets imported into the United States. The requirement is designed to prevent plant pests that can destroy domestic agriculture and livestock from entering the United States in wood packaging materials. The Department of Agriculture began implementation of the heat treatment requirement of wood packing material in September 2005. Wood pallets that carry products transported within the United States are not required to be heat treated.

Economy Cash & Carry uses wood pallets to transport food products and pharmaceuticals it sells in both the United States and Mexico. Sayklay was the warehouse manager for the El Paso-based company and was expected to direct the transfer of products destined for Mexico from untreated pallets to treated pallets.

Instead, Sayklay created a copy of a stamp certification used by a legitimate wood pallet treating company. Sayklay had hundreds of untreated domestic pallets falsely stamped as if they were treated, saving the time to transfer products between pallets as well as the cost of treatment.

The falsified stamp Sayklay used was smaller than the legitimate stamp. When companies that received the fraudulently stamped pallets from Mexico sent them to the legitimate stamp owner for repair, the legitimate stamp owner noticed the falsification and notified the government. A follow-up investigation by the Department of Agriculture resulted in the seizure of fraudulently stamped pallets at the U.S.-Mexican border.

The investigation was conducted by the U.S. Department of Agriculture. It was prosecuted by DOJ's Environmental Crimes Section and the U.S. Attorney's Office for the Western District of Texas.

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