Potato chip fraud: Ex-Utz exec sentenced

Kevin Myers, former purchasing director for Utz Quality Foods of Hanover, Pa., the #3 U.S. packaged-snacks maker, was sentenced Tuesday to four years and three months in federal prison, starting Jan. 16, "for his participation in a false invoice kickback scheme" that cost family-owned Utz $1.4 million, Bruce D. Brandler, U.S. Attorney in Harrisburg, says here.

Besides prison, federal judge Yvette Kane ordered Myers to pay back the money he took, and to pay another $1.4 million to the federal government. Myers, 38, was investigated by the FBI and prosecuted by Assistant U.S. Attorney Kim Douglas Daniel, with help from Utz. 

Myers' sentencing follows a July guilty plea by Jonathan Haas, owner of Haas Packaging and Design Inc., Easton, to federal accusations of wire fraud in the case. Haas faces sentencing in January.

 According to the prosecutor, Haas sold Utz shelving and packaging. But starting in 2010, owner Myers and purchasing agent Haas cooperated on overbilling the snackmaker: Over the next four years, Myers prepared "43 bogus purchase orders," and Haas sent Utz "83 false invoices for products Utz never received." Myers approved the invoices, paid Haas, and received kickbacks of around 44 cents for every dollar Haas collected under the scheme.

 "Myers and Haas attempted to conceal some of the kickbacks to Myers as payments for fictional consulting services," using the name of a phony Myers consulting company, according to the prosecutor. 

Utz, an $800 million (yearly sales) firm owned by descendants of the founding Rice family, has expanded rapidly through acquisitions of other regional snack firms since 2010, keeping up with a wave of brand takeovers by industry leaders Frito-Lay (a unit of Pepsico) and Snyder's-Lance Inc.

Last month Utz began partnering with Metropoulous & Co., whose other interests include Pabst beer and Twinkies, in an effort to improve the snack conglomerate's financing and its digital systems.   

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