CITY OF COMMERCE : Former Food Operators Pleads Not Guilty to Fraud

The former operators of a City of Commerce-based Mexican food manufacturing firm pleaded not guilty Monday to federal charges that they defrauded the Los Angeles school district of at least $918,000.

The defendants are accused of boosting profits by increasing the fat content in burritos, tortillas and beans to levels exceeding federal requirements for the National School Lunch Program.

Former company President Roger Peters, ex-Vice President Dahl Casey and former quality control manager John Jones were charged in a 25-count indictment on Feb. 24, for alleged fraud and conspiracy between 1986 and 1992.

In 1990, the Los Angeles Unified School District entered into a three-year contract with Kold Kist to buy 40,000 cases of burritos a year. The district terminated the agreement in December, 1992.

The indictment alleges that between January and September, 1992, Kold Kist defrauded the school district out of $918,000.

The district paid the firm with funds from the U.S. Department of Agriculture, which requires that the fat content of school meat be no greater than 305. Assistant U.S. Atty. Kimberly Dunne alleged that Kold Kist provided meat with a fat content of 50% or more.

Trial before U.S. District Judge Richard Paez is set for May 2.