AOH :: COFFEE.TXT|
Coffee Scandal Brews. Distributor allegedly duped millions of Java lovers
From: email@example.com (Home Skillet)
Subject: Coffee Drinkers Duped!
Date: Thu Nov 14 10:19:33 1996
Coffee scandal brews
Distributor allegedly duped millions of java lovers
November 13, 1996
Web posted at: 7:30 p.m. EST
SAN FRANCISCO (AP) -- Ahhh. The rich, robust aroma of fresh-brewed
Hawaiian Kona coffee. Or was it?
For nine years, millions of java lovers who believed they were enjoying
the expensive Hawaiian brand might actually have been drinking cheaper
Central American coffee, federal officials said.
A well-established U.S. coffee supplier is accused of mislabeling the
beans in order to make millions in a scandal that has rocked the industry.
Those duped include retailers and coffee houses nationwide, such as
Seattle-based Starbucks, federal officials said Tuesday.
"Every coffee (retailer) you can think of has been a victim," said Mark
Dankel, a senior special agent with the Customs Service in San Francisco.
"I suspect there'll be a wake-up call within the industry."
The distributor, Michael L. Norton, was arrested last week and charged
with fraud and money laundering. Authorities also seized or froze more
than $3.3 million in assets that belonged to Norton, owner of Berkeley-
based Kona Kai Coffee.
Federal officials, who began their investigation after getting a tip, used
secret informers, wiretaps and videotapes.
Follow the beans
Millions of pounds of coffee sold in burlap sacks labeled as Kona beans
from Hawaii were actually beans from Panama and Costa Rica, officials
contend. One videotape turned over to investigators shows workers putting
the cheaper beans in bags marked "Kona."
Norton made millions from the scheme, which began in 1987, officials said.
One informer said the figure was more than $20 million.
If convicted, Norton faces up to 25 years in prison and hundreds of
thousands of dollars in fines, U.S. Attorney Michael Yamaguchi said.
Norton was released on bail.
His lawyer, Christopher Cannon, denied the charges, saying that Kona is an
image or a type of coffee, not a place.
"Is all French bread baked in France?" Cannon asked. He said anyone who
thinks all Kona beans come from "one beach in Hawaii has to be out of
Kona beans can sell wholesale for as much as $9.75 a pound while inferior-
grade Panamanian beans fetch $1.80 a pound. Kona coffee is more expensive
because of what some describe as its complex, nutty aroma and rich flavor,
and the fact that it is hand-picked on tiny Hawaiian farms.
According to federal documents, Norton knew he was playing upon the
mystique of Kona beans.
In a phone conversation secretly recorded by a worker, Norton said, "All
right, so it's true we created a nonexistent demand and filled it with a
But, when the worker complained about feeling guilty about "the millions
of consumers that were duped," Norton answered, "Duped for what? They got
what they bought -- coffee."
Dianne Weitzel, co-owner of Kona Caves Plantation -- one of about 600
small family-owned Kona coast farms -- said, "We are all in shock."
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