Federal Enforcement Targets Unpaid Debts, Restricts Key Operators in Produce Sector
Three produce businesses are facing federal sanctions after failing to settle financial obligations arising from their purchase of fresh goods, marking a significant enforcement action by the U.S. Department of Agriculture (USDA).
On February 26, 2025, officials announced the suspension of the companies’ licenses under the Perishable Agricultural Commodities Act (PACA).
This measure directly impacts the ownership and management teams, who are barred from conducting PACA-related activities or from involvement in other produce operations without explicit USDA approval.
The decision underscores the government’s commitment to ensuring prompt and full payment for fresh and frozen fruits and vegetables within the marketplace.
Harvest Pro Inc. of Modesto, California, is among the sanctioned businesses.
The company owes $120,714 to a California seller after failing to comply with a reparation order.
In addition to the corporate entity, the USDA penalized Harvest Pro’s principal operator, identified as officer, director, and major stockholder, Danny Castillon.
Similarly, Fruit Point Produce Inc. in Chicago, Illinois, faces the same form of suspension for failing to pay a $9,100 award to a Texas seller.
Its officer, director, and major stockholder, Emmanuel Garcia, is restricted from operating in PACA-licensed business without USDA consent.
Meanwhile, E & R Produce LLC of McAllen, Texas, must answer to a $7,491 debt owed to a Missouri seller.
The USDA has temporarily removed its license while restricting the company’s manager, Eleazar Villarreal, from engaging in the produce sector under PACA guidelines unless authorized.
USDA took these steps in accordance with PACA’s provisions, which grant the agency an avenue to address disputes that arise in the buying and selling of fruits and vegetables.
PACA offers an administrative forum where complaints can be filed against a business that fails to fulfill its contractual commitments, potentially resulting in the issuance of a reparation order.
Such orders require those at fault to compensate the aggrieved parties.
When a produce company does not comply with a reparation order, USDA is mandated to revoke or suspend its operating license, in addition to imposing restrictions on individuals such as partners, officers, directors, or major stockholders found to be “responsibly connected” to that enterprise.
The businesses named in this sanction announcement each accrued unpaid debts to sellers in different states.
Although the amounts and specific obligations vary, the fundamental infraction is the same: none complied with a USDA-issued reparation directive to pay outstanding balances.
For each case, the agency also determined that the named individuals held sufficient authority in the company to be deemed responsible for ensuring compliance.
Because of this classification, those individuals cannot hold similar roles or seek employment with any other PACA-licensed entity without prior authorization from the USDA.
PACA’s central goal is to protect both buyers and sellers in the perishable goods industry, ensuring that fair dealing prevails.
By establishing a framework for recourse when disputes arise, it sets clear expectations for timely payments, helps resolve disagreements over shipment quality or quantity, and offers mechanisms to recoup financial losses.
The three cases currently in the spotlight serve as reminders to industry participants that breaching these standards can lead to severe consequences, including a shutdown of business operations and long-term restrictions on managerial or ownership pursuits.
By issuing these penalties, USDA continues to enforce the prompt and full payment for produce while protecting the rights of sellers and buyers in the marketplace.
PACA enforcement is not merely about punishing non-compliant businesses; it also aims to cultivate a stable environment where transactions involving perishable items are conducted responsibly.
Companies found in violation may face not only financial penalties but reputational damage that can hinder future commercial success.
