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The exterior of Pilgrims Prepared Poultry in Mount Pleasant/ File photo
SEC says owners funneled funds from business accounts
Pilgrim’s Prepared Poultry parent company JBS is facing fines after an alleged price-fixing and bid-rigging conspiracy which took place at least from 2012 to 2017, according to the US Department of Justice.
According to documents from the United States Securities and Exchange Commission (SEC), Wesley and Joesley Batista, owners of JBS, have partaken in a bribery scheme over the course of years, allowing the brothers to take control of Pilgrim’s and funnel funds out of the business’s accounts.
Pilgrim’s Pride Corporation announced on Oct. 14 in an email to shareholders it has entered into a guilty plea agreement with the US Department of Justice. In the plea agreement, which is subject to the approval of the United States District Court, Pilgrim’s and the DOJ agreed to a fine of $1.1 million for their alleged crimes. Owners Wesley and Joesley Batista will individually pay approximately $200,000 in fines, the FEC said.
Pilgrim’s CEO Jayson Penn, former Pilgrim’s vice president Roger Austin, and former Pilgrim’s executive Scott Brady are facing federal criminal charges after a price-fixing conspiracy that took place at least from 2012 to 2017. Mikell Fries, an executive from the Claxton firm, another of the nation’s largest poultry suppliers, was also indicted in the charge, and the four were summoned to court on June 4 in Colorado.
The indictment states that when Brady resigned as an executive for Pilgrim’s in 2012, he began working for Claxton. Allegedly, since then, the companies have been conspiring to keep prices on poultry up. In a recent statement following the indictment, Claxton Poultry said, “Allegations that company leaders conspired with other poultry companies in an effort to increase prices are without merit.”
“Pilgrim’s Pride and Claxton executives communicated to each other non-public information about negotiations with fast-food chains and grocery stores and put forth similar bids,” the indictment stated.
Pilgrim’s stock dropped more than 12% the week they were indicted, according to market data. Currently, the company is seeing a deficit of approximately 1.05%.
If convicted, the maximum sentence would be 10 years in federal prison and a $1 million fine, but the fine can increase if the amount lost by consumers or gained by the companies was more than $1 million.
According to the Department of Justice, the investigation remains ongoing.
Reporter Taylor Nye contributed to this report.