Economy Cash & Carry Inc., pleaded guilty in U.S. District Court in El Paso, Texas, to a criminal violation of the Plant Protection Act related to the falsification of a required certificate stamp, the Justice Department and the Department of Agriculture (USDA) announced.

Previously Michael Sayklay, the former vice president of Economy Cash & Carry, pleaded guilty to a felony charge for falsifying stamps that certified wood pallets were heat-treated to prevent infestation, and were suitable for use in international transportation. In March 2006, Sayklay had the false stamp affixed to Economy Cash & Carry wood pallets, which were used to carry products back and forth across the U.S.-Mexican border.

At the hearing, Economy Cash & Carry was sentenced to pay a fine of $22,000. A sentencing date for Sayklay has not been set by the court.

USDA requires the heat treatment of wood pallets used in international transactions. The requirement is to prevent parasites and plant diseases from entering the United States in wood packaging materials. USDA began implementation of the heat treatment requirement of wood packing material in September 2005. Wood pallets that carry products transported within the United States are not required to be heat treated. This was the first criminal conviction under the new regulation.

Economy Cash & Carry utilizes wood pallets to transport food products and pharmaceuticals it sells in both the United States and Mexico. Sayklay was the warehouse manager for the El Paso-based company, and was expected to direct the transfer of products destined for Mexico from untreated pallets to treated pallets. Instead, Sayklay created a copy of a stamp certification utilized by a legitimate wood pallet treating company. Sayklay had hundreds of untreated domestic pallets falsely stamped as if they were treated, saving the time to transfer products between pallets as well as the cost of treatment. However, the falsified stamp Sayklay used was smaller than the legitimate stamp.

Subsequently, other companies who received the fraudulently stamped pallets from Mexico, sent them to the legitimate stamp owner for repair. The legitimate stamp owner noticed the falsification and notified the government. A follow-up investigation by the USDA resulted in the seizure of fraudulently stamped pallets at the U.S.-Mexican border.

The investigation was conducted by USDA. It was prosecuted by the Justice Department’s Environmental Crimes Section, and the U.S. Attorney’s Office for the Western District of Texas.