NEW YORK -- The Beech-Nut baby food company was indicted Wednesday on charges it sold millions of jars of phony apple juice actually filled with sugar water and caramel coloring.
Federal prosecutors in Brooklyn also charged the company continued to ship the jars after learning the juice was bogus in an effort to cut its losses.
U.S. Attorney Andrew Maloney released the 470-count indictment alleging the Beech-Nut Nutrition Corp., its president and five others sold the concoction of beet sugar, cane sugar, corn syrup, apple flavoring, malic acid and caramel coloring in 20 states, Puerto Rico, the Virgin Islands and five foreign countries from 1978 to 1983.
Niels Hoyvald, the Beech-Nut president and chief executive officer, and John Lavery, the firm's vice president for manufacturing, were charged with violations of the Food, Drug and Cosmetics Act, conspiracy and fraud.
'Providing consumers with accurate and informative food labeling is essential to the consumer's ability to make intelligent choices,' Maloney said.
The defendants face up to three years in prison and $10,000 in fines on each count of violating the Drug Act; up to five years and $10,000 for conspiracy, and up to five years and $1,000 for each count of fraud.
In a statement, Beech-Nut, based in Fort Washington, Pa., said the company would plead innocent when arraigned this week.
The phony juice might be considered a health risk for infants who are diabetic or on special diets, said Pitt Smith, an Food and Drug Administration official in the Buffalo, N.Y., area, where the juice was manufactured.
Smith said the purported scam was discovered during routine FDA testing.
In its statement, Beech-Nut acknowledged 'some' of the concentrate it bought from a supplier did not contain apple juice, although it looked and smelled like the real thing.
But the company maintained that at the time it was using the concentrate, there was 'no generally accepted scientific test to determine whether it was pure apple juice.'
Beech-Nut also said the company recalled juice made from the concentrate in the fall of 1982.
The indictment charged, however, that after government officials contacted Beech-Nut about the juice in July 1982, the company continued to ship millions of jars to minimize a potential loss of $3.5 million.
In addition to Hoyvald and Lavery, who is in charge of the Canajoharie, N.Y, plant where the concentrate was diluted into juice, the indictment named the concentrate suppliers and distributor as participants in the scam.
Those charged were Zeev Kaplansky, former president of Universal Juice Inc., which operated out of the Bronx under the names Interjuice Trading Corp., Nameco Trading and Zee Vee Foods Corp.; Raymond Wells, former owner of Food Complex Co. Inc, of Queens; Nina Williamson, former Food Complex employee and company officer; Danny Shaeffer, of Nameco Trading; and South Orange Express of Clifton, N.J, which labeled, stored and shipped the phony product.