The president of Wye River Inc. – a Queenstown, Md., crab and seafood seasoning company – pled guilty Thursday to one count of mail fraud in a scheme to defraud the Food Lion grocery store chain of $328,555.
Joseph L. Bernard III, 41, was charged after FBI investigators discovered that Wye River Inc. was presenting inflated invoices to several Food Lion stores between 1988 and August 1993, according to the U.S. attorney’s office in Baltimore.
Bernard, the company’s sole shareholder and a resident of Queenstown on Maryland’s Eastern Shore, faces up to five years in jail and a $250,000 fine, said Joyce McDonald, an assistant U.S. attorney in Baltimore.
Bernard has worked out a repayment plan with Food Lion and has made “substantial repayments,” McDonald said.
He is in the process of resigning his job as president of Wye River as a result of his plea, said Nicholas Kallis, his lawyer.
Food Lion Inc., based in Salisbury, N.C., first discovered it was overpaying Bernard when the chain opened a new store in Easton, Md., McDonald said. The chain has 1,051 stores in 14 primarily Southern states, including 27 stores in Maryland.
When the new store opened, it did not have its computer system installed yet, so inventory was done manually, McDonald said. That’s when company officials realized they were being charged for more products than they were receiving, she said.
Food Lion found that it had been overpaying for a variety of crab and seafood seasonings, which were produced for the gourmet food market by the family company.
Wye River Inc., founded by Bernard in 1985, did not defraud any of its other customers, according to the U.S. attorney’s office.
“Mr. Bernard realizes that he made a mistake and he’s putting his best foot forward to make restitution,” said Kallis. “It happened because he had received some improper professional advice and he simply made a mistake….
“He is really a very good person, and he has done everything possible to deal with these mistakes,” Kallis said.
Melinda Dabbs, a spokeswoman for Food Lion, said the company could not comment on the specifics of the case. She said Food Lion is cooperating with the FBI. After pleading guilty in U.S. District Court in Baltimore, Bernard was released on his personal recognizance. His sentencing will be in Baltimore Jan. 23, McDonald said. -30-