About

Important information

• Additional Info:

  
  UNITED STATES DISTRICT COURT
  NORTHERN DISTRICT OF ILLINOIS
  EASTERN DIVISION
  UNITED STATES OF AMERICA
  )
  )
  )
  No. 13 CR 137
  v.
  )
  )
  Honorable Virginia Kendall
  GROEB FARMS, INC.
  )
  )
  )
  Defendant GROEB FARMS, INC., a Michigan corporation with its principal
  place of business in Onsted, Michigan, by
  and through its undersigned attorney,
  pursuant to authority granted by its Board of Directors, and the United States
  Attorney's Office for the Northern District of Illinois, enters into this Deferred
  Prosecution Agreement. The terms and cond
  itions of this Agreement are as follows:
  The Criminal Information
  1.
  GROEB FARMS waives indictment an
  d agrees to the filing of a one-
  count Information in the United States District Court for the Northern District of
  Illinois, charging that on or about January 25, 2010, in the Northern District of
  Illinois, Eastern Division and elsewhere,
  GROEB FARMS, as part of a fraudulent
  practice, received and bought merchandise
  , namely, twenty-two container loads of
  Chinese-origin honey with a contract va
  lue of $882,178, knowing the same to have
  been imported and brought into the United
  States contrary to law, namely, as part
  of a fraudulent practice in violation of
  Title 18, United States Code, Section 542, in
  that the honey was falsely and fraudulent
  ly imported and brought into the United
  States described as Chinese honey syrup,
  some of which was transported through
  the Northern District of Illinois and late
  r delivered into the
  Northern District of
  Illinois as finished product, in violation of Title 18, United States Code, Sections
  545 and 2. A copy of the Information is attached as Appendix A.
  Acceptance of Responsibility
  2.
  GROEB FARMS accepts and acknowledges responsibility for its
  conduct and that of its current and former
  executives and employees as set forth in
  the Factual Statement attached hereto and incorporated by reference herein as
  Exhibit A, as well as the additional co
  nduct set forth in the Factual Statement,
  1
  which constitutes relevant conduct under United States Sentencing Guidelines
  §1B1.3. GROEB FARMS agrees that it sha
  ll not contest or otherwise challenge the
  admissibility into evidence of the Factual
  Statement, the facts contained within the
  Factual Statement, or any other document
  , testimony, or other evidence the USAO
  NDIL might use in any related criminal
  prosecution against GROEB FARMS in the
  event of a material breach of this Agreement.
  Cooperation
  3.
  GROEB FARMS agrees to cooperate fully with the USAO NDIL and
  with any other agency with which the USAO NDIL requests GROEB FARMS to
  cooperate, regarding any matter about
  which GROEB FARMS has knowledge.
  GROEB FARMS' agreement to cooperate sh
  all extend until the completion of law
  enforcement investigations of any criminal activity relating to the illegal
  importation and entry of honey into the Un
  ited States, including any investigations
  or prosecutions of others, but in no even
  t shall that cooperation be less than the
  duration of this Agreement, that is, twenty-four months.
  4.
  GROEB FARMS agrees that its cooper
  ation, as agreed to in Paragraph
  3 of this Agreement, shall include, but
  is not limited to, th
  e following, although
  GROEB FARMS' cooperation shall not incl
  ude production of materials covered by
  the attorney-client privilege or the work product doctrine:
  (a)
  Completely and truthfully disclosing all information as may be
  requested by the USAO NDIL with respect to the activities of GROEB FARMS and
  its present and former board of directors, agents, officers, executives, and
  employees, as well as any brokers, count
  er parties, other third parties, and
  customers concerning all matters inquired into by the USAO NDIL;
  (b)
  Assembling, organizing, and timely providing on request from the
  USAO NDIL all documents, records, or ot
  her tangible evidence in GROEB FARMS'
  possession, custody, or control;
  (c)
  Using its best efforts to make available its present and former board
  of directors, agents, officers, executives, and employees to provide information
  and/or testimony as requested by the USAO NDIL, including sworn testimony
  before a federal grand jury or in federal
  trials, as well as interviews with federal
  law enforcement authorities. Cooperat
  ion under this Agreement will include
  identification of witnesses who, to GR
  OEB FARMS' knowledge and belief, may have
  material information regarding the matters under investigation;
  2
  (d)
  Providing testimony and other information deemed necessary by the
  USAO NDIL or a court to identify or est
  ablish the original location, authenticity,
  or other evidentiary foundation necessary to
  admit into evidence documents in any
  criminal or other proceeding as requested by the USAO NDIL; and
  (e)
  Disposing on a voluntary bas
  is and according to
  law any illegally
  transshipped, illegally misdeclared, or
  illegally entered Chinese-origin honey,
  whether in raw, blended, or finished form, of which GROEB FARMS has knowledge
  and which resides in GROEB FARMS' possession, custody, or control.
  Fine
  5.
  GROEB FARMS agrees to pay $2,000,000 to the United States as a
  monetary penalty within thirty days of th
  e filing of this Agreement in Court.
  If
  GROEB FARMS fails to fulfill its obligations
  to pay the penalty and is deemed in
  default under the terms of this Agreem
  ent, GROEB FARMS agrees and stipulates
  to the entry of a judgment against it for the unpaid amount and shall fully
  cooperate in that process. The parties ha
  ve agreed to the penalty based on GROEB
  FARMS' financial ability to pay, as conf
  irmed by financial statements and other
  representations made by GROEB FARMS and its representatives to the United
  States, under penalty of perjury and pr
  osecution for false statements.
  GROEB
  FARMS understands that any misrepresent
  ations concerning its financial status
  would constitute a material breach of this Agreement.
  6.
  If GROEB FARMS materially breaches this Agreement as determined
  by the USAO NDIL within its exclusive discretion, any monies paid by GROEB
  FARMS to the United States shall not
  be returned to GROEB FARMS and any
  outstanding sums still owed
  to the United States sha
  ll remain due to the United
  States. The USAO NDIL agrees, however,
  to recommend to
  the Court that the
  amount paid pursuant to this Agreement should be offset against whatever fine the
  Court shall impose as part of its judgment
  in the event of a subsequent prosecution
  against GROEB FARMS.
  Deferral of Prosecution
  7.
  In consideration of GROEB FARMS'
  cooperation, as well its remedial
  actions to date, and its willingness to (i)
  accept and acknowledge responsibility for
  the conduct of its current and former exec
  utives, employees, and agents as detailed
  in the Factual Statement; (ii) have already implemented and continue further
  implementation of new, enhanced remedial
  actions as specified in Exhibit B; (iii)
  demonstrate its future good conduct and full compliance with U.S. importation
  3
  laws, the Food, Drug, and Cosmetic Act ("FDCA"), and other federal laws; (iv)
  educate customers and other industry participants regarding illegally transshipped,
  illegally misdeclared, and unsafe or unwho
  lesome products, including honey; (v)
  continue its cooperation with the USAO NDIL, law enforcement, and other
  government agencies as specified in Paragr
  aphs 3 and 4; (vi) volunteer to dispose
  according to law any honey specified in
  Paragraph 4(e); and (vii) pay the monetary
  penalty set forth in Paragraph 5, the USAO NDIL shall recommend to the Court,
  pursuant to Title 18, United States Code, Section 3161(h)(2), that prosecution of
  GROEB FARMS on the Information filed pursuant to Paragraph 1 be deferred for
  a period of twenty-four months from the date of the Court's Order. Specifically,
  upon execution of this Agreement, and pursuant to Title 18, United States Code,
  Section 3161(h)(2), the USAO NDIL sha
  ll move, unopposed by GROEB FARMS, to
  present this Agreement to the Court and
  move for a continuance of all further
  criminal proceedings, including trial, for a
  period of twenty-four months, for speedy
  trial exclusion of all time covered by such a continuance, and for approval by the
  Court of this deferred prosecution.
  8.
  The USAO NDIL agrees th
  at if GROEB FARMS has not committed a
  material breach of this Agreement for tw
  enty-four months from the date of the
  Court's Order deferring prosecution, th
  e USAO NDIL shall seek dismissal with
  prejudice of the Information filed agai
  nst GROEB FARMS pursuant to Paragraph
  1, and this Agreement shall expire and be of no further force or effect.
  Government Commitment
  9.
  Except in the event of a material br
  each of this Agreement, during the
  term of this Agreement and upon expira
  tion of this Agreement as set forth in
  Paragraph 8, the USAO NDIL shall not further pursue investigations relating to
  the matters set forth in the Factual Statem
  ent that have been, or could have been,
  conducted by the USAO NDIL prior to th
  e date of this Agreement as to GROEB
  FARMS.
  Court Not Bound
  10.
  GROEB FARMS and the USAO NDIL understand that the Agreement
  to defer prosecution of GROEB FARMS must be approved by the Court, in
  accordance with Title 18, United States Code, Section 3161(h)(2). Should the Court
  decline to approve this Agreement for any reason, both the USAO NDIL and
  GROEB FARMS are released from any ob
  ligation imposed upon them by this
  Agreement and this Agreement shall be null and void.
  4
  Waiver of Rights
  11.
  GROEB FARMS agrees to waive and hereby expressly waives all rights
  to a speedy trial pursuant to the Si
  xth Amendment of the United States
  Constitution, Title 18, United States Co
  de, Section 3161, Federal Rule of Criminal
  Procedure 48(b), and any applic
  able Local Rules of the United States District Court
  for the Northern District if Illinois for the period that this Agreement is in effect.
  12.
  In case of a material breach of this Agreement, any prosecution of
  GROEB FARMS relating to the informatio
  n and facts contained in the Factual
  Statement or any crime arising therefrom th
  at is not time-barred by the applicable
  statute of limitations as of the date of
  this Agreement, may be commenced against
  GROEB FARMS notwithstanding the expi
  ration of any applicable statute of
  limitations during the deferred prosecution period and up to the determination of
  any material breach and for one year ther
  eafter. Thus, by signing this Agreement,
  GROEB FARMS agrees that the statute of limitations with respect to any related
  prosecution that is not time-barred on th
  e date of the signing of this Agreement
  shall be tolled for the period of this
  Agreement plus one year. GROEB FARMS'
  waiver of the statute of limitations
  is knowing and voluntary and in express
  reliance on the advice of counsel. Up
  on the successful completion of this
  Agreement, all applicable statutes of limitations shall be in effect.
  Breach of this Agreement
  13.
  Should the USAO NDIL determine that GROEB FARMS has
  committed a material breach of any prov
  ision of this Agreement, the USAO NDIL
  shall provide written notice to GROEB F
  ARMS of the alleged breach, and provide
  GROEB FARMS with a thirty day (30) period
  , or longer at the reasonable discretion
  of the USAO NDIL, in which to make a presentation to the USAO NDIL, to
  demonstrate that no material breach has o
  ccurred, or, to the extent applicable, has
  been cured. The parties expressly understand and agree that should GROEB
  FARMS fail to request an opportunity to present facts in mitigation within a
  two-week period of the potential breach, it shall be conclusively presumed that
  GROEB FARMS is in material breach of this Agreement. The parties further
  understand and agree that the USAO NDIL's exercise of discretion under this
  Paragraph is not subject to review in
  any court or tribunal outside of the
  Department of Justice. In the event of
  a material breach of this Agreement that
  results in a prosecution of GROEB FARMS, such prosecution may be premised upon
  any information of which law enforcement
  is aware as well as any information
  provided by or on behalf of GROEB FARMS to the USAO NDIL or any other
  government agency. As set forth in Paragraph 2 of this Agreement, GROEB
  5
  FARMS shall not contest or otherwise cha
  llenge the admissibility into evidence of
  the Factual Statement, the facts contained within the Factual Statement, or any
  other document, testimony, or other evid
  ence the USAO NDIL might use in any
  criminal prosecution against GROEB FARMS
  in the event of a material breach of
  this Agreement.
  Requirement to Obey the Law
  14.
  Should the USAO NDIL determine du
  ring the term of this Agreement
  that GROEB FARMS has committed any fe
  deral crime commenced subsequent to
  the date of this Agreement, GROEB FARMS shall, in the sole discretion of the
  USAO NDIL, thereafter be subject to pr
  osecution for any federal crimes of which
  the USAO NDIL has knowledge, including but not limited to the conduct described
  in the Factual Statement.
  Public Statements
  15.
  GROEB FARMS expressly agrees that
  it shall not, through its present
  or future attorneys, board of directors,
  agents, officers, executives, or employees,
  make any public statement contradicting
  any statement of fact contained in the
  Factual Statement. Any such contradictory public statement by GROEB FARMS,
  its attorneys, board of directors, agents, officers, executives, or employees shall
  constitute a material breach of this Agr
  eement as governed by Paragraph 13 of this
  Agreement, and GROEB FARMS shall thereafter be subject to prosecution
  pursuant to the terms of this Agreement.
  16.
  The decision of whether any statem
  ent subject to Paragraph 15 of this
  Agreement contradicts a fact contained in the Factual Statement and should be
  imputed to GROEB FARMS for purposes of determining whether GROEB FARMS
  has breached this Agreement shall be in
  the sole and reasonable discretion of the
  USAO NDIL. Upon the government's noti
  fication to GROEB FARMS of a public
  statement by any such person that in whole or in part contradicts a statement of
  fact contained in the Factual Statemen
  t, GROEB FARMS may avoid a breach of
  this Agreement by publicly repudiating
  such statement within two business days
  after notification by the government. Th
  is Paragraph is not intended to apply to
  any statement made by any individual in
  the course of any criminal, regulatory, or
  civil case initiated by a governmental or
  private party against such individual.
  In
  addition, consistent with GROEB FARMS' obligation not to contradict any
  statement of fact set forth in the Factual Statement, GROEB FARMS may take
  good faith positions in litigation involving
  any person or entity not a party to this
  Agreement. Nothing stated in this Agreement is intended to operate or shall
  operate as a waiver of GR
  OEB FARMS' rights under Federal Rule of Evidence 408.
  6
  Additional Terms
  17.
  GROEB FARMS agrees that, if
  GROEB FARMS' business operations
  are sold to a party or parties affiliated or unaffiliated with GROEB FARMS as of
  the date of this Agreement, whether by sale
  of stock, merger, consolidation, sale of
  a significant portion of its assets, or other form of business combination, or
  otherwise undergoes a direct or indirect change of control during the term of this
  Agreement, GROEB FARMS shall include in any such contract or instrument a
  provision binding the purchaser/successor to
  all the obligations described in this
  Agreement.
  18.
  It is further understood that this Agreement is binding on GROEB
  FARMS and the USAO NDIL, but specifica
  lly does not bind any other federal
  agencies, or any state or local authoritie
  s, although the USAO NDIL will bring the
  cooperation of GROEB FARMS and its comp
  liance with its other obligations under
  this Agreement to the attention of federal, state, or local prosecuting offices or
  regulatory agencies, if requested by GROEB FARMS or its attorneys. It is
  understood that this Agreement also excludes
  any natural persons. It is the intent
  of the parties to this Agreement that the
  Agreement does not confer or provide any
  benefits, privileges or rights to any indi
  viduals or other entities other than the
  parties hereto, and that nothing in th
  e Agreement shall be admissible in any
  proceeding other than a proceeding brought by the USAO NDIL. Moreover,
  GROEB FARMS may raise defenses and/or assert affirmative claims in any civil
  proceedings brought by private parties as
  long as doing so does not otherwise
  violate any term of this Agreement.
  19.
  It is further understood that this
  Agreement does not relate to or cover
  any criminal conduct by GROEB FARMS othe
  r than the conduct described in the
  Factual Statement.
  20.
  GROEB FARMS and the USAO NDIL agree that, upon acceptance by
  the Court, this Agreement and an Order deferring prosecution shall be publicly filed
  in the United States Distri
  ct Court for the Northern Di
  strict of Illinois, Eastern
  Division.
  21.
  This Agreement sets forth all the terms of the Deferred Prosecution
  Agreement between GROEB FARMS and the USAO NDIL. No modifications or
  additions to this Agreement shall be valid
  unless they are in writing and signed by
  the USAO NDIL, GROEB FARMS' attorneys, and a duly authorized GROEB
  FARMS' representative.
  7
  ________________________
  __________________________________
  ________________________
  __________________________________
  __________________________________
  22.
  GROEB
  FARMS
  and
  its attorneys acknowledge that no threats,
  promises,
  or
  representations
  have
  been
  made,
  nor
  agreements
  reached,
  other
  than
  those
  set
  forth
  in
  this
  Agreement
  to
  ca
  use GROEB FARMS to enter into this
  Agreement.
  AGREED
  :
  FOR GROEB FARMS, INC.
  DATE
  ROLF B. RICHTER
  Chief Executive Officer
  Duly Authorized Representative
  GROEB FARMS, INC.
  FOR THE UNITED STATES ATTORNEY'S OFFICE FOR THE
  NORTHERN DISTRICT OF ILLINOIS
  DATE
  GARY S. SHAPIRO
  United States Attorney
  Northern District of Illinois
  ANDREW S. BOUTROS
  Assistant United States Attorney
  8
  ________________________
  __________________________________
  CERTIFICATE OF CORPORATE RESOLUTIONS
  The undersigned Secretary of GROEB FARMS, INC., a Michigan corporation,
  hereby certifies that the following resolu
  tions were duly enacted by the Board of
  Directors of GROEB FARMS on February 8, 2013, and that such resolutions remain
  in full force and effect:
  WHEREAS, GROEB FARMS has been engage
  d in discussions with the United
  States Attorney's Office for th
  e Northern District of Illinois to resolve criminal liability
  relating to its honey-related businesses; and
  WHEREAS, in order to resolve such discu
  ssions, it is proposed that GROEB
  FARMS enter into a deferred prosecution agr
  eement with the United States Attorney's
  Office for the Northern District of Illinois; and
  WHEREAS outside counsel for GROEB FARMS has advised the Board of
  Directors of GROEB FARMS' rights, possi
  ble defenses, and the consequences of
  entering into such agreement with the United States Attorney's Office for the Northern
  District of Illinois;
  Therefore, this Board hereby RESOLVES that:
  1.
  GROEB FARMS agrees and consents
  to the entry of the Deferred
  Prosecution Agreement with the United States Attorney's Office for the Northern
  District of Illinois;
  2.
  Outside counsel and GROEB FARMS' President and Chief Executive
  Officer are hereby authorized, empowered
  and directed, on behalf of GROEB FARMS,
  to execute the Deferred Prosecution Agreemen
  t substantially in such form as reviewed
  by this Board of Directors at this meeting with such changes as outside counsel may
  approve; and
  3.
  Outside counsel and GROEB FARMS'
  President and Chief Executive
  Officer are authorized, empowered and direct
  ed to take any and all actions as may be
  necessary or appropriate, and to approve
  the forms, terms, or provisions of any
  agreement or other documents as may be ne
  cessary or appropriate to carry out and
  effectuate the purpose and intent of the foregoing resolutions.
  DATE GEORGE
  CAWMAN
  Chairman of the Board of Directors
  GROEB FARMS, INC.
  9
  ________________________
  ________________
  ___________________
  OFFICER'S CERTIFICATE
  I, ROLF B. RICHTER, the duly authorized representative of GROEB
  FARMS, INC., hereby expressly acknowledge the following: (1) I have the authority
  to sign this Deferred Prosecution Agreement;
  (2) I have read this entire Agreement;
  (3)
  I have had an opportunity to disc
  uss this Agreement fully and freely with
  GROEB FARMS' attorneys; (4) GROEB FARMS fully and completely understands
  each and every one of its terms and th
  e Agreement's consequences; (5) GROEB
  FARMS is fully satisfied with the advice an
  d representation provided to it by its
  attorneys; and (6) GROEB FARMS has signed this Agreement voluntarily.
  DATE
  ROLF B. RICHTER
  Chief Executive Officer
  GROEB FARMS, INC.
  10
  ________________________
  __________________________
  _________
  COUNSEL'S CERTIFICATE
  The undersigned are outside counsel for GROEB FARMS, INC. In connection
  with such representation, I acknowledge
  that I: (1) discussed this Deferred
  Prosecution Agreement with my client, GROEB FARMS; (2) fully explained each
  one of its terms to GROEB FARMS; (3) fully
  answered each and every question put
  to me by GROEB FARMS regarding this Agreement; and (4) believe GROEB
  FARMS completely understands all of this
  Agreement's terms and its consequences.
  FOLEY & LARDNER LLP
  DATE
  Lisa
  Noller
  Counsel for GROEB FARMS, INC.
  11
  Exhibit A
  FACTUAL STATEMENT
  GROEB FARMS, INC. admits and agrees to the following facts and that
  those facts establish its guilt beyond a reasonable doubt and constitute relevant
  conduct pursuant to Guideline §1B1.3:
  On or about January 25, 2010, in the
  Northern District of Illinois, Easter
  n Division and elsewhere, GROEB FARMS,
  together with Executive A and Executive
  B, as part of a fr
  audulent practice,
  received and bought merchandise, namely, twenty-two container loads of
  Chinese-origin honey with a contract va
  lue of $882,178, knowing the same to have
  been imported and brought into the United
  States contrary to law, namely, as part
  of a fraudulent practice in violation of
  Title 18, United States Code, Section 542, in
  that the honey was falsely and fraudulent
  ly imported and brought into the United
  States described as Chinese honey syrup,
  some of which was transported through
  the Northern District of Illinois and late
  r delivered into the
  Northern District of
  Illinois as finished product, in violation of Title 18, United States Code, Sections
  545 and 2. More specifically,
  1.
  GROEB FARMS, INC., was the larg
  est industrial honey supplier and
  packer in the United States, with its principal place of business in Onsted,
  Michigan and other processing and packin
  g facilities, namely, Belleview, Florida;
  Colton, California; San Bernardino, California since December 2012; and from
  January through September 2011, Baytown,
  Texas. GROEB FARMS processed and
  sold honey to retail, foodservice, and in
  dustrial customers. In about March 2007,
  outside investors purchased a majority in
  terest in GROEB FARMS and constituted
  a new Board of Directors with oversight functions.
  2.
  Executive A was a senior GROEB FARMS executive, who reported
  directly to GROEB FARMS' Board of Directors and exercised control, authority,
  responsibility, and supervision over GRO
  EB FARMS, including its operations and
  executive management team. Executive A
  served as management's primary point
  of contact to the Board of Directors and communicated directly to the Board,
  GROEB FARMS' customers, and the public regarding GROEB FARMS' polices,
  positions, and practices on food safe
  ty and illegally transshipped and illegally
  misdeclared honey.
  3.
  Executive B was a senior GROEB FARMS executive who reported
  directly to Executive A an
  d exercised control, authority, responsibility, and
  supervision over purchasing honey on behalf of GROEB FARMS.
  1
  4.
  At times material to this Agreement, Executive A and Executive B
  were acting within the scope of their em
  ployment, with intent to benefit GROEB
  FARMS, and in the course of the discharge of their duties.
  5.
  Beginning no later than February 2008 and continuing until about
  April 2012, GROEB FARMS, as pa
  rt of a fraudulent practice, received, bought, sold,
  and facilitated the transportation, concea
  lment, and sale of merchandise, namely,
  at least approximately 1,578 container load
  s of Chinese-origin honey knowing the
  same to have been imported and brought
  into the United States contrary to law,
  namely, as part of a fraudulent practice in
  violation of Title 18, United States Code,
  Section 542, all in violation of Title 18, United States Code, Section 545.
  6.
  As part of the fraudulent practice, GROEB FARMS, acting through
  Executive A and Executive B, purchased Chinese-origin honey for processing at its
  facilities and sold that honey to its domestic customers as mislabeled non-Chinese
  honey, and at other times as Chinese hone
  y, all while knowing that the honey had
  been falsely and fraudulently imported
  and entered into the United States in
  avoidance of U.S.-imposed antidumping duti
  es and at times, honey assessment fees,
  including in the following means:
  a.
  falsely and fraudulently declarin
  g Chinese-origin honey as having
  originated from countries other than China, including Indonesia,
  Malaysia, Mongolia, Thailand, and Vietnam; and
  b.
  falsely and fraudulently describing
  Chinese-origin honey as a product
  other than honey, including sugars and syrups.
  7.
  Beginning in or about 2008 and continuing through in or about 2012,
  GROEB FARMS instituted first-party onsi
  te supply chain audits and inspections
  of manufacturers and suppliers. As part of
  the fraudulent practice, Executive A and
  Executive B:
  a.
  continued to deliberately purchase honey from U.S.-based brokers
  receiving honey from Asian suppliers,
  including Suppliers 1, 2, 3, and
  4, even after the audits raised subs
  tantial concerns that these overseas
  suppliers were providing GROEB
  FARMS with illegally transshipped
  and misdeclared Chinese-origin honey;
  b.
  continued to deliberately purchase honey from another U.S.-based
  broker receiving honey from anothe
  r Asian supplier, Supplier 5, even
  2
  Exhibit B
  CORPORATE COMPLIANCE PROGRAM
  Goods shipped from a country of origin to a country of intermediate
  destination, mislabeled as to country of
  origin, and that ultimately pass through a
  customhouse at the port of final destination and enter into the United States as a
  misdeclared product, are considered
  illegally "transshipped."
  Specifically,
  Chinese-origin honey imported into the Un
  ited States through third countries and
  mislabeled and declared as originat
  ing from a third country is illegally
  "transshipped." Chinese-origin honey impo
  rted and entered into the United States
  as originating from a country other than China, even if not transshipped, is
  considered an illegally misdeclared produc
  t. Similarly, Chinese-origin honey
  imported and entered into the United States as a product other than honey,
  including, for example, molasses, fructose
  , rice syrup, glucose syrup, honey syrup,
  and apple juice concentrate is also consider
  ed an illegally misdeclared product.
  The
  United States assesses antidumping duties on Chinese-origin honey and honey
  assessment fees on all honey. Illegally
  transshipped, mislabeled, and misdeclared
  Chinese-origin honey can avoid these duti
  es and fees, in violation of U.S. law.
  Furthermore, illegally transshipped, mislabeled, and misdeclared honey can create
  a two-tier pricing structure for honey:
  higher prices for buyers and sellers
  unwilling to transact in transshipped, mislabeled, and misdeclared honey and
  cheaper prices for those willing to do so or who are otherwise indifferent.
  The Food, Drug, and Cosmetic Act ("FDCA") and Food Safety Modernization
  Act ("FSMA") are designed to ensure that
  foods are safe, wholesome, sanitary, and
  properly labeled.
  The purpose of this Corporate Complianc
  e Program is to ensure that GROEB
  FARMS, INC. maintains supply chain integrity and conducts reasonable, good-faith
  country-of-origin inquiries reasonably desi
  gned to ensure that GROEB FARMS is
  able to track and trace its domestic and imported products, as well as avoid
  transacting in illegally transshipped, illegally misdeclared, and unsafe or
  unwholesome products, including honey.
  To prevent and address deficiencies in its policies and procedures regarding
  full compliance with U.S. importation and customs laws, the FDCA and FSMA, and
  other federal laws relating to honey and other products (collectively, the
  "traceability and food laws"), GROEB FARMS
  agrees to continue to conduct, in a
  manner consistent with all of its obligat
  ions under this Agreement, appropriate
  reviews of its internal controls, existing policies, and procedures.
  1
  Where necessary and appropriate, GR
  OEB FARMS agrees to adopt new or
  to modify existing policies and procedures to ensure that it maintains a rigorous
  compliance code, standards, and procedures
  designed to detect and deter violations
  of the traceability and food
  laws. At a minimum, this
  should include, but not be
  limited to, the following elements to the ex
  tent they are not already part of GROEB
  FARMS' existing policies and procedures:
  1.
  A clearly articulated corporate policy, adopted by formal resolution of
  GROEB FARMS' Board of Directors, agains
  t violations of the traceability and food
  laws. Among other things, the corporate policy shall make clear that it is a federal
  crime for anyone to fraudulently or kn
  owingly import or bring into the United
  States, any merchandise contrary to law
  (including U.S. importation and customs
  laws, the FDCA and FSMA), or receive,
  conceal, buy, sell, or in any manner
  facilitate the transportation, concealment, or sale of such merchandise after
  importation, knowing the same to have b
  een imported or brought into the United
  States contrary to law.
  2.
  Promulgation of compliance stan
  dards and procedures designed to
  reduce the prospect of vi
  olations of the traceabilit
  y and food laws and GROEB
  FARMS' compliance code and appropriate
  measures to encourage and support the
  observance of ethics and compliance stan
  dards and procedures against traceability
  violations at all levels of
  the company. These standards and procedures shall apply
  to all directors, officers, executiv
  es, and employees, and where necessary,
  appropriate, and practical, outside parties
  acting on behalf of or for the benefit of
  GROEB FARMS, including, but not lim
  ited to, agents, brokers, traders,
  representatives, manufacturers, producer
  s, processors, distributors, teaming
  partners, joint venture partners, and others
  (collectively, "agents, brokers, and
  others").
  3.
  Development of these compliance st
  andards and procedures, including
  ethics and compliance programs on the basis of a risk assessment addressing the
  individual circumstances of each honey pu
  rchasing transaction, including, but not
  limited to: (a) market conditions at the
  time of the transaction, as well as (b)
  reasonable country-of-origin and supply chain
  inquiries, including a review of the
  honey's:
  (i)
  paperwork, markings, and labe
  ls, or lack, incompleteness, or
  tampering thereof;
  (ii)
  verified container numbers;
  (iii)
  drum conditions and color;
  (iv)
  price;
  (v)
  volume;
  2
  (vi)
  sales condition, including spot buy versus long-term contract;
  (vii)
  claimed country of origin, incl
  uding the honey production outputs
  of the claimed country, whether the claimed origin has been used as a
  transshipping route, and whether the country
  is a historic net consumer or exporter
  of its honey;
  (viii)
  seller, agent, or broker an
  d each's track record and business
  practices, including use of affiliates or
  third parties to import into the United
  States, a higher risk practice than directly serving as the importer of record;
  (ix)
  claimed manufacturer, factory, producer, or processor and the good-
  faith due diligence and supply chain audits
  conducted thereof, if any, including the
  willingness and extent of access granted for the audits; thoroughness, scope, and
  frequency of the audits; and the training,
  expertise, and credibility of the auditor;
  and
  (x)
  claimed importer of record and any information or background
  relating to the same.
  4.
  Periodic review of its complianc
  e standards and procedures, including
  ethics and compliance programs, taking into
  account relevant developments in the
  field and evolving industry standards, an
  d update and adapt as necessary to ensure
  the continued effectiveness of the company's ethics and compliance programs in
  detecting and reducing violations of the traceability and food laws and GROEB
  FARMS' compliance code.
  5.
  Mechanisms designed to ensu
  re that GROEB FARMS' policies,
  standards, and procedures regarding the tr
  aceability and food laws are effectively
  communicated to all directors, officers, executives, and employees, and where
  necessary, appropriate, and practical, agents, brokers, and others. These
  mechanisms shall include: (a) periodic trai
  ning for all directors, officers, executives,
  and employees, and where necessary, approp
  riate, and practical, agents, brokers,
  and others; and (b) annual certifications by
  all such directors, officers, executives,
  and employees, and where necessary, approp
  riate, and practical, agents, brokers,
  and others, certifying compliance with the training requirements.
  6.
  An effective system for receiving, reporting, handling, and addressing
  suspected criminal conduct and/or violatio
  ns of the compliance policies, standards,
  and procedures regarding the traceability
  and food laws for directors, officers,
  executives, and employees, and where necessary, appropriate, and practical, agents,
  brokers, and others, as to known complaints
  that arise internally and externally of
  the company.
  7.
  Appropriate disciplinary procedures
  to address, among other things,
  3