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Tomato king sees empire fall

Scott Salyer could have taken the easy way.

He could have lived off the interest from one of California's largest farm fortunes, whiling away the days pursuing his passions of dove hunting and go-kart racing.

But that wasn't the Salyer way. Never has been.

Since his grandfather Clarence started the Salyer Land Co. in Corcoran in the 1920s, ambition and conflict have marked the family history.

The Salyers survived water wars and labor strife. They fought with rival farmers, government agencies and among themselves. By the time Clarence "Cockeye" Salyer died in 1974, the family controlled 100,000 acres in California.

And still that wasn't enough.

Maybe that is how Frederick Scott Salyer ended up in this mess, facing a possible 20 years in federal prison in what prosecutors describe as one of the most audacious food industry schemes ever, one apparently designed to corner the nation's market for processed tomato products.

The conspiracy drove up food prices for people nationwide who used certain ketchup, salsa, juice, paste and any of dozens of other tomato-based products, and introduced old and moldy tomatoes into grocery stores, prosecutors contend.

The government has more than half a dozen food industry executives lined up to testify to buttress its case.

The case includes Anthony Ray Manuel, 57, formerly of Morning Star Packing Co. in Turlock and then an SK Foods executive. He has pleaded guilty to wire fraud and filing false tax returns. He is cooperating with the FBI.

Salyer, whose attorney declined to allow him to be interviewed, has pleaded not guilty and plans to fight the charges.

From the time he earned his agribusiness degree at California Polytechnic State University, San Luis Obispo, in 1979, Salyer has worked in family ventures, creating companies, seeking out markets and building an international empire that, until its collapse last year, did more than $700 million in annual sales.

He took a farming operation that grew cotton and safflower and expanded into lettuce and tomatoes, shaping it into one of the industry's largest producers.

Today the 54-year-old Salyer sits in a seventh-floor cell at the Sacramento County main jail, denied bail because a federal magistrate judge has deemed him a flight risk.

"Scott's a tough guy, but he's had to really, really dig deep to hold up under this thing," said Bob Pruett, 53, a businessman and confidant who met Salyer 40 years ago on the go-kart circuit. "It's very difficult to see him in that situation."

Old friends cite generosity

People who have known him for decades say they cannot fathom how it came to this, how the ribald and sometimes racially charged conversations caught on electronic intercepts could have come from a man they say is generous to a fault and as down to earth as any of the farmworkers he employed.

The story has reverberated through the Monterey Peninsula since April 16, 2008, when more than 100 FBI and Internal Revenue Service agents raided Salyer's home and businesses as part of a probe begun in 2005.

Publicity about the investigation dried up customers and available credit. His SK Foods LP collapsed into bankruptcy in May, throwing people out of work and shocking residents of Carmel and Pebble Beach, where Salyer lived and was known as a benefactor who gave millions to charity and held lavish parties for his employees.

Calvin Carter, a Morgan Hill electronics executive, said that when he met Salyer in college, there was no clue to his background.

"For the longest time, I didn't know he was from one of the wealthiest farm families in California," said Carter, who remains a close friend of Salyer and his family.

Friends describe a man whose idea of the perfect meal is microwaving frozen White Castle burgers at midnight, or firing up a barbecue to grill chicken for friends -- and for his cherished dog, Louis, who always, against all advice, got human cookies for dessert.

Salyer's gated estate sits atop a hill in Pebble Beach, where outsiders pay $9.25 for the privilege of driving along 17-Mile Drive to take in the vistas and gaze at the mansions.

Scott Salyer and his father, Fred, have not spoken in years, friends say, and at one point clashed in court, with the father accusing the son of misappropriating funds.

Scott Salyer idolized his grandfather Clarence, who was pushed out of the land company in his last years by sons Fred and Everette.

"I don't know, maybe that's a Sal-yer tradition," Pruett said. "Maybe they're too alike. Maybe that's part of where it comes from."

The roots of the family are laid out in "The King of California," a book published in 2003 by San Joaquin Valley historians Mark Arax and Rick Wartzman.

With no money and no assurance of a job, Cockeye Salyer came out of the Virginia hills in 1918 to the San Joaquin Valley, where he went to work as a mule skinner and rose to ranch superintendent.

He leased 800 acres, launching what would become a seemingly unquenchable search for more land in the valley's flat expanses. He had a mangled eye that wandered so far to the left that all you saw was white.

To sidestep inheritance taxes, he gave a majority of the stock in the Sal-yer Land Co. to his sons.

Later, they forced him out and he died a bitter man. Fred eventually discovered that Everette had stolen millions from the company, the authors wrote.

Everette died in 1982. Fred, now 86, lives on the original homestead in Corcoran. His name is absent from the long list of people who have written to the court urging his son's release.

Even Scott's friends concede that defending the criminal case shapes up as a formidable task.

Wealth of documents, tapes

Federal prosecutors have compiled more than 1 million documents and 100 hours of recorded conversations caught on wiretaps and a body wire worn by a mole at SK Foods.

Nine people -- Salyer employees or food company purchasing managers who say they were bribed -- have pleaded guilty, and a 10th has agreed to. Seven of them are cooperating with the government.

Like coyotes around a campfire, agents and prosecutors circled Salyer for four years. They contend that they uncovered a massive, 10-year conspiracy hatched and carried out by the leadership of Monterey-based SK Foods.

Salyer is charged with a racketeering enterprise that bribed buyers at huge conglomerates such as Kraft Foods and Frito-Lay in order to eliminate competing bids and secure above-market prices for his company's products.

He is accused of passing off conventionally grown produce as organic, and of falsifying records and product labels to disguise that produce was older than promised or contained such high levels of mold that it could not be legally sold in the United States.

Prosecutors say the conspirators sent millions of pounds of misbranded or moldy tomato paste into the national marketplace, including to Heinz USA, Tyson Foods Inc. and Gerber Products, the baby food maker.

The government maintains that the overarching conspiracy did not cause health problems for those who bought products made with the paste. Prosecutors say, however, that the conspiracy hiked the average consumer's grocery bills.

Salyer's friends say they suspect he gave his business associates too much authority, and they attribute his troubles, at least in part, to Randall Lee Rahal, a 61-year-old food broker from New Jersey who worked for SK Foods and reportedly was on the company's board at one time.

Rahal was the first to fall, pleading guilty in December 2008 to racketeering, money laundering, bid rigging and price fixing.

Like eight of the others charged in the case, Rahal remains free while the investigation continues, and court documents are filled with excerpts from recorded, sometimes- profane conversations between Sal-yer and Rahal as they discussed whom to bribe and for how much.

Carter, Salyer's friend since college, occasionally would run into Rahal, and said he was uncomfortable around him.

"Rahal just seemed to be a little different," Carter said. "I guess you'd call it arrogance." Rahal, Carter said, "was an intense individual -- he just wasn't in line with the Salyer family I know." Still, he said, "Scott would let him do what he wanted. Scott's management style was always positive, like, 'Let's do it.' "

The government charges that Sal-yer tried to disguise how close he was to Rahal. After Salyer learned Rahal had pleaded guilty and was helping the government, he ordered that minutes of a company board meeting be altered so as not to reflect Rahal's attendance, prosecutors allege.

Empire in tatters

Since the government probe became public, the Salyer family dynasty -- built over three generations -- has largely disintegrated into bankruptcy, antitrust and unfair competition lawsuits and the staggering array of criminal charges. SK Foods, with three plants in the Central Valley, was sold out of bankruptcy last year to a Singapore company for $39 million.

Lawyers on both sides say Salyer has millions in bank accounts and trusts but there is no way to tell how much will be left when the smoke has cleared, and whether he will be free anytime soon to spend any of it.

Carter recalled Salyer coming to see him Dec. 11, Salyer's 54th birthday, and the two going to lunch.

Salyer knew that a federal indictment was looming but was more interested in talking about the approaching birth of his grandchild, Carter said.

"He was always working hard for his company and was concerned for his employees, especially as all this unraveled," Carter said. "Scott didn't like to talk about these things. But you could see it in his face."

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