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Oregon DOC Food Manager Takes Over $1 Million in Bribes, Feeds Prisoners “Distressed” Food

During a 2002 interview, Oregon Department of Corrections (ODOC) Food Services Administrator Farhad “Fred” Monem, 49, shook his head in disgust as he criticized government employees who feel a sense of entitlement. “People work for so many years and feel the taxpayer owes them,” he said. “But to me, nobody deserves anything. I always try to not be one of those guys.”

In a 2005 performance review Monem provided a glowing self-evaluation, describing himself as “continually striving to exceed professional and ethical standards, as well as setting the highest measurement as a role model for fellow staff members.” His ODOC supervisors agreed; they publicly praised him for his outstanding performance, which cut prison food costs by 40 percent.

While everyone was busy patting Monem on the back, however, he was robbing Oregon taxpayers blind in what authorities describe as one of the worst corruption cases in state history. Between mid-2000 and December 2006, Monem “supplemented” his $79,000 annual salary with at least $1,132,000 in bribes and kickbacks from brokers who sold food to the ODOC – often food of dubious quality.

Now the subject of a federal indictment and a lawsuit filed by Oregon officials, Monem has fled and is presently on the lam.

Monem’s American Dream

Monem was born in Iran and deserted from mandatory military service in the Shah of Iran’s army. Facing execution, he went into hiding; in 1979 his father snuck him aboard a plane bound for the United States. Monem attended the University of Michigan on a student visa before transferring to Southern Vermont College, where he graduated with a degree in general studies and engineering, if his ODOC job application is to be believed.

Monem became a United States citizen, took culinary courses and worked in the restaurant industry. He managed three family-style restaurants in California before going to work for a now-defunct food services company. As a manager with the company, he oversaw food service contracts with institutional clients in five states, including more than a dozen jails and prisons in California, Nevada and Washington.

In 1991, ODOC opened the Snake River Correctional Institution, a 3,000-bed facility, and Monem’s firm won the contract to handle prisoner meals. He later added ODOC’s Columbia River Correctional Institution and Powder River Correctional Facility to the company’s food service contracts.

Prison officials were impressed with Monem’s efficiency and “ability to wheel and deal,” and in January 1996 offered him a job. “This guy is a salesman, and he’s very good at it,” said former ODOC Director Dave Cook, who ran the department from 1995 to 2002. “He’s very charismatic. He’s a person I would probably want to send to buy a used car, if I could.”

According to ODOC spokeswoman Perrin Damon, just eight months after hiring Monem the prison system created the Food Services Administrator position for him. In that position Monem was solely responsible for an annual budget of approximately $10 million for prisoner meal and canteen purchases.

Creating a Framework for Fraud

At the time Monem was hired, ODOC was under constant pressure from lawmakers and budget analysts to cut costs during a $1 billion prison-building boom, according to Cook. “As we were building these prisons, and we looked like the big dog eating all the chow in the bowl, we were getting constant pressure to relieve costs in various areas,” he recalled. “If we wanted to continue to do any programming, any treatment, any education, or anything else, we had to find ways to squeeze money,” said Cook. “Certainly food service was one of those.”

Working with ODOC financial analysts, Monem devised an unusual cost-cutting “spot buy” program in which he would trade on the commodities markets, purchasing food in bulk. “I endorsed the idea,” Cook admitted. “I thought if we could lower the cost of the raw materials for feeding inmates, without sacrificing quality or safety, then why wouldn’t we do it?”

As in most prison systems ODOC’s food distribution was decentralized, which prevented prison officials from buying in bulk because there was no place to store mass quantities of food. So Monem convinced ODOC officials to seek legislative approval to purchase an old distribution center from a supermarket chain, to be utilized as ODOC’s central warehouse.
The legislature approved the purchase on the condition that ODOC find money within its budget to fund the operation. “They said, if you guys are going to save all this money, then take the savings from here and run the place,” explained Monem in 2002.

Illustrating the benefit of the central warehouse, Monem rattled off a few of his purchases – including 5,000 cases of corn at $12 a case before it doubled in price just a few months later, and 35 tons of frozen French fries at 12 cents a pound from an Idaho producer. Normally 56 cents a pound, Monem saved $30,800 because the fries were discolored and had been rejected by other buyers. “If they had to take it to 14 [different prisons], the company wouldn’t sell it to me,” explained Monem. “It would be cheaper for them to dump it, so this [warehouse] gives me the ability to get these kinds of savings.”

Another unique aspect of Monem’s “spot buy” program made his under-the-table bribes and kickbacks not only possible but almost undetectable: He alone made all ordering decisions, and was authorized to spend up to $200,000 per transaction using purchase orders rather than formal contracts. ODOC assistant director John Koreski acknowledged that Monem didn’t have to get anyone’s approval.

Lowest Prison Food Costs in the Nation

Even now, former ODOC Director Cook praises Monem. “I don’t know if anybody has totaled that up, but [his cost-cutting savings have] got to be over $10 million,” he estimated. Under Monem’s watch, daily food costs in Oregon’s prison system dropped from $3.95 per prisoner ($1.32 per meal) in 1997 to $2.38 ($0.79 per meal) in 2006 – a 40 percent reduction. Only eleven states feed prisoners for less, according to a U.S. Department of Justice survey. Another report ranked Oregon as having the third lowest prison food cost in the nation.

“I think he did a great job of saving the Department of Corrections money,” said Cook. “I used to laud him publicly. He had a skill and he had a series of contacts. In retrospect, those contacts may also have allowed this to happen.” As it turns out this was a monumental understatement, as Monem’s contacts included food liquidators Douglas Levene of Walkersville, Maryland and Michael Levin, William Lawrence and Howard Roth of Santa Clarita, California, who were his partners in crime.

Liquidators are small companies that operate on the fringes of the multi-billion dollar food industry. They deal in an obscure “secondary” food market that is virtually invisible to the general public. Liquidators want to keep it that way, operating without trade groups or customary modern marketing tools such as websites.

Food liquidators and brokers buy and sell products cast off by name brand giants such as Kraft, Tyson and Foster Farms. They often pay 10-30 cents for a product worth $1.00 on the wholesale market and resell it for 60-70 cents, according to former Los Angeles food liquidator Joseph Shamir. Even with the markup, the end customer still pays far less than the original wholesale price, such as with Monem’s discolored French fries. Monem had also paid 62 cents a box for five truckloads of a children’s cereal that normally wholesales at $3.25, because a word-search game on the box inadvertently spelled S-E-X. Of Mrs. Field’s oatmeal raisin-and-nut cookies, which usually sell for $1.98 a package, Monem boasted he had paid just 36 cents.

“Products may be sold through brokers for a variety of reasons, like excess inventory, minor inconsistencies in color or shape, or a product that is getting too close to its code date to sell in normal channels where a longer shelf life may be required,” explained Janet Riley, spokeswoman for the American Meat Institute in Washington, D.C.

Food liquidators often deal in goods that have a short shelf life or are harder to sell; the food is frequently labeled “distressed” because it is close to its expiration or “use by” date. They typically target institutions like prisons, mental hospitals and homeless shelters, which must feed large numbers of poor people as cheaply as possible.

Liquidator Douglas Levene operated in the restaurant supply business before getting into prison food in Florida. In 1998, Levene worked for the New York-based 21st Century Supply Corporation, arranging deals with Florida and Pennsylvania prison officials. Two years later he opened his own company in Maryland, and by 2002 was selling $2.8 million in distressed food to ODOC annually, which he purchased from 21st Century Supply and Michael Levin Trading, aka Levin & Lawrence, Inc. (L&L), one of the largest food liquidators on the West Coast.

By the end of 2004, Levene’s ODOC sales had reached $3.8 million a year, until L&L cut him out as the middleman on Monem’s food purchases. However, Levene continued to sell to ODOC as an agent of 21st Century Supply until 2007.

Food broker Michael Levin developed a distribution company in Los Angeles in the 1980s, but his high-rolling lifestyle reportedly ended in a 1991 bankruptcy. Liquidator Joseph Shamir hired Levin and “doubled [his] business,” but Levin and his company soon vanished. “I showed up for work one day and there was no drivers, no customers,” recalls Shamir.
Levin then created a new company called Michael Levin Trading, leaving Shamir to wonder how a freshly bankrupt business could afford trucks and products.

Levin aggressively courted manufacturers by paying on the spot and taking entire truckloads without question, explained Los Angeles broker Roger Glade, who bought and sold from Levin for years. Levin partnered with William Lawrence, a former grocery chain meat buyer, to create L&L, Inc. Their business quickly grew to $25 million a year.

After eliminating Levene as the middleman for Monem’s food purchases in late 2004, L&L’s sales to ODOC more than doubled the following year, from $800,000 to $1.7 million. Between July 2004 and December 2006, L&L sold approximately $4.36 million in distressed food to the ODOC.

L&L Employees “Dropped the Bomb”

The food liquidation business is a cut-throat industry, having little interest in loyalty, ethics or fair dealing. Greed reigns supreme. While the industry created fertile ground for Monem’s fraudulent scheme to take root and flourish, it also proved to be the one, and likely only, thing to bring it to an end.

“How are we going to detect it unless something goes sideways?” asked former ODOC Director Dave Cook. “Which is apparently what happened. I mean somebody apparently dropped the bomb. Somebody decided to talk.”

Evidently employee morale wasn’t terribly high at L&L. An employee reportedly got out of repaying a $9,000 loan to the company with a threat: “Back off,” the employee told the company’s controller, “or I’ll blow the lid on Fred.” Then, in May 2006, the controller and another L&L employee decided to leave the firm to start their own competing food company.

The unidentified L&L controller called Levin to tell him he was quitting, which prompted Levin to terminate a Hawaii vacation and order Lawrence to meet the controller in a warehouse, alone. Lawrence told the controller that Levin wanted to know if he could trust him to keep quiet about Monem. According to federal investigators, the controller asked what it was worth to keep the secret. Lawrence responded, “Your life!”

Despite, or perhaps because of the threat, the departing L&L employees reported the bribery scheme to the Internal Revenue Service in October 2006. They said that by 2003, Monem was buying large quantities of distressed food from L&L in exchange for 20 percent of the company’s net profit on ODOC sales, according to an affidavit filed in federal court by IRS Special Agent Robert Salisbury.

The former L&L controller was repeatedly asked to write checks for the payoffs by Levin and Lawrence, who frequently peppered him with e-mails or notes saying things like, “I need a check for cash for you know who.” One Post-it note, now in the possession of the IRS, stated “Mikey needs a check for $8k for cash against Fred’s commission.”

The controller also told investigators he once heard L&L salesman Howard Roth say that if a certain product was hard to sell, they would “make Fred buy it.” The other cooperating L&L employee informed agents he often overheard Roth negotiating prices by phone with Monem.

In 2003, Levin, Lawrence and Roth reportedly began delivering cash directly to Monem in Las Vegas, where they typically gave him $3,000-$8,000 at a time. Company officials treated Monem and his wife Karen to expensive stays at the Mandalay Bay Hotel and Casino, which is famous for its 11-acre beach and an aquarium stocked with sharks.

In November 2006, IRS agents tailed Monem on one of his Las Vegas trips. Agent Salisbury observed Monem and L&L officials arrive by limousine at Mandalay Bay and check in at the VIP service desk. Records later seized by the government revealed that Monem, often accompanied by his wife, had traveled to Las Vegas at least 29 times between 2002 and 2006. Monem told his ODOC supervisors that he was traveling to Nevada to provide consulting services to Nevada state officials.

IRS and FBI Raids Reveal Cooked Books

On January 10, 2007, IRS and FBI agents raided the California office of L&L as well as Monem’s ODOC office and home in Salem, Oregon. Search warrants were not executed against Levene, signaling his cooperation with federal authorities.

During the search of Monem’s home, agents discovered $12,410 in a briefcase, $75,000 in $100 bills in a gunsafe, a diamond ring worth nearly $9,500, and baggies of marijuana and hashish. A safety deposit box at the Monems’ bank held another $444,700 in cash.
Investigators seized over half a million dollars during the raid. Many of Monem’s other questionable assets also were discovered, including a 21-foot pleasure boat, a 2006 BMW 650Ci worth $79,000, an $18,000 Chevy Silverado pickup, a GMC Denali and a 1968 Ford Mustang convertible worth $27,000. All were allegedly fruits of Monem’s crimes.
As valuable as the search of Monem’s residence proved to be, the L&L raid was even more important. Levin and Lawrence quickly cooperated and spilled their guts about the full extent of Monem’s kickback scheme.

In April and May 2007, within four months of the raids, Levene, Levin, Lawrence and Roth all pleaded guilty in federal court to charges of bribery and tax fraud in exchange for cooperation against Monem. Each faces a maximum of 13 years in prison and a $500,000 fine. However, Assistant U.S. Attorney (AUSA) Christopher Cardini said the government would recommend the lower end of the sentencing range so long as the defendants fulfilled their obligations, including cooperating in the prosecution of other parties involved in the kickback scheme. The brokers’ cooperation was a “key element” in the plea agreements, according to AUSA Kent Robinson.

Their cooperation revealed a bribery scheme that was far more extensive and went on three years longer than prosecutors had initially believed. In a “Statement of Facts” filed in support of his guilty plea, Levene admitted that he paid his first bribe to Monem in the summer of 2000, by sending him $1,500 in cash via FedEx, to ensure future food sales to ODOC. Subsequent FedEx deliveries of cash bribes ranged between $1,500 and $5,000.

In early 2001, Monem and Levene agreed to equally split the profits from ODOC food sales. Levene admitted to meeting Monem and his wife in Oregon, Maryland and Nevada, delivering between $10,000 and $30,000 in cash each time.

Beginning in 2003, Karen Monem received credit cards from two companies set up by Levene. She used them for personal expenses such as automobiles, jewelry, clothing and food. Levene’s companies paid the credit card bills. At about the same time, Levene began sending Karen weekly $1,000 checks. At Fred’s request the checks were increased to $1,500, and continued for approximately 80 weeks. In total, more than $206,000 in cash and credit card payments flowed to the Monems from a corporation registered to Levene’s wife.

Levene admitted that Karen Monem “performed no legitimate service” for the credit cards, cash and checks she received. Rather, the payments were arranged “to disguise the true nature of the bribery payments.” Levene also admitted that he sent cash to other Monem relatives at Fred’s request.

By the end of 2004, Levene’s food sales to ODOC totaled $3.8 million annually. He estimated that he had paid Monem bribes of “at least $600,000” in exchange for more than $8.5 million in ODOC business.

Levin, Lawrence and Roth admitted to similar arrangements with Monem. Upon pleading guilty, the L&L officials acknowledged that cash payments to Monem were listed in the company books as consulting fees, but were actually designed to “cement” their relationship with him. By early 2003, Monem had agreed to purchase large quantities of distressed food from L&L in exchange for 20 percent of the company’s net profits from ODOC sales, according to an affidavit filed in federal court.

In August 2004, L&L executives met with Monem in Las Vegas to pay him $12,000 in cash for the previous month’s food sales to ODOC. Fearing that future cash payments would draw undue attention, L&L officials instructed the Monems to form a corporation “to conceal the nature of the payments and to create tax deductions having the appearance of legitimate business expenses for L&L, Inc.,” admitted the brokers.

On September 9, 2004, Monem’s wife registered an Oregon corporation called Jamm Inc., then sent invoices to L&L “making it appear that Jamm Inc. had provided consulting services,” averred IRS Agent Salisbury. The first L&L check, for $12,000, was paid to Jamm Inc. on September 17, 2004.

“To conceal the bribery scheme and to create improper tax deductions for L&L Inc., Howard Roth, with the approval of Michael Levin and William Lawrence, created false invoices … making it appear that [Jamm Inc.] had performed legitimate consulting services for which it was due commission payments,” L&L officials admitted. “In reality, the … corporation performed no consulting services for L&L Inc., and the payments … were made to influence and reward Monem and corruptly ensure future sales of distressed foods … to ODOC.”

L&L paid $88,000 to Jamm Inc. in 2004, $183,000 in 2005 and $249,000 in 2006, for a total of $520,000 between September 2004 and December 2006.

Life was good for the Monems. In June 2005, Fred partnered with Lawrence and Roth to purchase a $383,000 ocean view home in Seal Rock, Oregon. Two months later they formed a new company, Laromo Inc., to own and lease the property, according to county records and IRS Agent Salisbury. The Monems invested in at least two other Oregon rental properties. Fred’s kickback scheme also apparently paid for a golf club membership and storage for his 21-foot pleasure boat.

Monem further bought a white 2006 BMW 650Ci, reportedly paying cash. L&L executives worried how he might explain purchasing a vehicle that cost as much as his annual salary. Monem said he would claim his father or uncle gave him the money, according to Roth and a company informant.

ODOC records reveal that L&L’s sales skyrocketed under the bribery scheme. Between July 2004 and January 2007, L&L sold the Oregon prison system $4.36 million in distressed foods, of which Monem realized a 20 percent cut of the profits. In total, ODOC purchased $21 million worth of food from Levene and L&L between 2002 and 2006 – about 40 percent of its food expenditures – according to court records.

Monem Faces the Music, Then Flees

Following the January 10, 2007 searches of his office and home, Monem was allowed to remain free upon his lawyer’s assurance that he wouldn’t run. He surrendered his passport and agreed not to liquidate any assets, explained AUSA Robinson. “The conditions he voluntarily agreed to were what would have been asked of him if we had arrested him and taken him to court,” Robinson said. “We therefore believed we had reasonable assurance that he would not flee.”

With all of his co-conspirators turning against him, Monem attempted to cut a deal of his own. On June 28, 2007, prosecutors and investigators met with the Monems and their attorneys to outline a proposed pre-charge plea agreement. “The purpose of the meeting was to discuss evidence gathered in the investigation against Fred … and Karen Monem, and a possible pre-indictment resolution,” stated Agent Salisbury. Prosecutors declined to discuss the terms of the plea offer but indicated it would have required prison time for Fred, where he would get to sample prison food firsthand.

The Monems agreed not to dispose of any assets until the criminal case was over, while the government agreed to delay seeking forfeiture of assets seized during the raids. The Monems were given about three weeks to decide whether to accept the government’s deal. Fred apparently didn’t need the extra time, having no intention of taking the proposed plea offer.

In late June 2007, the Monems sold their 21-foot pleasure boat for $25,000, according to Agent Salisbury. The day before they met with the prosecutors, the Monems withdrew $9,500 from their bank account. They withdrew another $10,000 the day of the meeting and $9,500 three days later, for a total of $29,000. Karen Monem later tried, unsuccessfully, to obtain funds from Fred’s ODOC retirement account.

On July 1, 2007, Fred Monem boarded a flight to Buffalo, New York with a return ticket dated ten days later. But according to Agent Salisbury the return ticket was never used. Fred disappeared.

Monem has a brother in Montreal, Canada who is a development analyst for the Canadian government; Fred had paid his brother’s college tuition. Fred’s father – who has filed a claim with the IRS for part of the $444,700 in cash found in Monem’s safety deposit box – still lives in Iran with other family members. In 1980, however, the U.S. broke diplomatic relations with Iran, so there is no extradition treaty between the countries should Monem make it back to his homeland.

It has been over a year since Monem disappeared and there is no indication the government is anywhere close to apprehending him. “We are disappointed that these developments will lead to an inevitable delay of justice,” stated ODOC deputy director Mitch Morrow.

Few fugitives successfully outrun federal agents, observed Stephen Saltzburg, a former deputy U.S. Attorney General. The odds are high, he said, that Monem will be caught. Once apprehended, the June 28, 2007 plea bargain will be off the table. “All bets are off,” said AUSA Robinson. “There will be consequences for Mr. Monem for his conduct.”
Prosecutors have refused to comment on how Monem’s disappearance will affect the criminal cases involving the other defendants, but no action has been taken in their cases since Monem fled, except repeated continuances.

Fred abandoned his teenage son and wife, leaving her behind to face the music alone. On July 18, 2007, prosecutors filed conspiracy charges against both Fred and Karen Monem. An arrest warrant was issued, and federal agents arrested Karen at her workplace. She was released the same afternoon after appearing before U.S. Magistrate Judge Thomas Coffin, who refused prosecutors’ requests to electronically monitor her whereabouts.

Oregon Files Suit, Feds File Indictment

Within weeks of discovering that Monem was on the run, the State of Oregon filed a $1.13 million civil lawsuit against both him and his wife to recover proceeds of the bribery scheme. The suit, filed in Marion County Circuit Court, seeks forfeiture of the Monems’ real and personal property, including any money derived from their alleged crimes. “His fleeing Oregon compels us to move to ensure that Monem’s assets are applied to recover [ODOC] payments to food suppliers that the State alleges were funneled to Monem as bribes,” said Oregon Attorney General Hardy Myers in a news release. See: State v. Monem, Circuit Court for Marion County, Oregon, Case No. 07C17510.

On October 19, 2007, a federal grand jury returned a 20-count indictment against Fred and Karen Monem, charging them with bribery, conspiracy, money laundering, mail fraud, wire fraud and interstate travel in aid of racketeering. The indictment also seeks criminal forfeiture of more than $600,000 in currency and other assets alleged to have been obtained as fruits of their crimes. See: United States v. Monem, U.S.D.C., D.Ore., Case No. 6:2007-cr-60093.

In November 2007 the FBI offered a $20,000 reward for information leading to Fred Monem’s arrest and conviction. The agency stated it had committed “significant resources” to finding him, including field offices in New York, agency attachés in Canada and alerts through Interpol, which assists in cross-border cases.

The agency is investigating whether Monem fled to his native Iran. “Mr. Monem is an international fugitive,” observed AUSA Cardini. “It may be he has some plan to make identity documents.” Cardini informed the court that Monem may be in possession of social security cards, his marriage certificate and his son’s birth certificate.

Prison Officials Blindsided?

ODOC officials claim they were blindsided by Monem’s kickback scheme. “There was not a single red flag,” remarked ODOC Director and former state Senator Max Williams. Charles Hibner, Director of the State Audits Division, explained that the best chance of uncovering a kickback situation is for supervisors to watch for anomalies, such as a flashy lifestyle that doesn’t match a public paycheck. Presumably this would include Monem’s 2006 BMW, which cost more than his annual salary; his 21-foot pleasure boat; his multiple rental properties; and his 29 trips to Las Vegas in four years. Yet none of these red flags caught the eye of Monem’s supervisors, even though he drove the BMW to work.

Concentrations of business with only a few suppliers may also signal illegal buying patterns, according to purchasing and auditing experts. The two food liquidators at the center of the Monem scandal received approximately 40 percent of ODOC’s annual food business between 2002 and 2006, totaling around $21 million. Yet Monem’s supervisor, Don Charlton, said the large payments to only a few food vendors didn’t alarm him. He admits, however, that when he assumed his position he realized better controls were needed over Monem’s operation.

Other ODOC officials agreed. “I had no reason to suspect anything unusual was going on, but I could see there was a terrific potential for abuse,” said Ron Parks, a former Information Systems Analyst and Projects Coordinator for the ODOC. “There’s a huge amount of money being spent by the department, and one guy, Mr. Monem, [had] a lot of control over it.”

Soon after the scandal broke, ODOC officials were quick to say that Monem had little freedom to operate on his own. “For each and every buy, we ensure we are getting the best price by checking with vendors who have access to the same commodity,” the ODOC claimed in a written statement. Prison officials said Monem would find food products, then a purchasing specialist would locate at least two similar price quotes and compare them against previous prices before approving a contract. “Fred had no influence as to who the quotes were from,” the ODOC initially stated.

Just days later, however, prison officials conceded that although standard agency procedures required someone other than Monem to get price comparisons before his deals went through, for years Monem did so himself, thereby evading a key safeguard against fraud. Don Charlton and ODOC assistant director John Koreski admitted that the system had not worked as intended. Rather than turning the price comparisons over to purchasing agents in another unit, Monem “would go out to the marketplace and look for competing bids to compare against the price he had just gotten,” acknowledged Koreski. But wait – it gets worse.

Keeping It in the Family

In October 2000, the ODOC apparently unwittingly hired William F. Morgan, Jr., who was Fred Monem’s brother-in-law, to serve as Monem’s “administrative aide.” Despite ODOC policy barring managers from supervising relatives, Morgan reported directly to Monem, who also conducted his work evaluations.

“Fred was supposed to be teaching him,” ODOC spokeswoman Perrin Damon said of Morgan – and teach him Monem did. Morgan assisted Monem with making food purchases and auditing food service operations at state prisons.

In April 2006, Morgan was promoted to State Purchaser, tasked with getting comparable quotes on Monem’s food buys. “[Morgan] was independent,” said Don Charlton, who did not learn that Morgan and Monem were related until January 2007.

As ODOC’s food purchaser, Morgan still reported directly to Monem but had more responsibility for the multi-million dollar prison food program, including making food purchases himself. Ironically, Morgan was “to maintain the integrity of the food service program,” according to his job description.

Prison officials did not learn of the relationship between Monem and Morgan until federal agents searched Monem’s office. Authorities expressed no concerns about Morgan after questioning him at that time, according to the ODOC; thus, he was not immediately removed from his job. Two weeks later, however, federal investigators provided ODOC with “new information,” though they refused to elaborate. Prison officials found that Morgan had not accurately completed a form requiring him to identify any relatives employed by ODOC.

The discovery of the inaccurate form, coupled with the new information from federal authorities, prompted the ODOC to place Morgan on paid administrative leave in February 2007. ODOC spokeswoman Damon denied that the action had anything to do with The Oregonian posing questions the previous day about the relationship between Morgan and Fred Monem. She said the timing of the inquiry and Morgan’s suspension was merely a “coincidence.”

At the time of his suspension, Morgan admitted to ODOC officials that he had done some outside “consulting” with Monem and had received a payment from Jamm Inc., the Monems’ corporation. He also resided in a rental home the Monems had purchased with money from Fred’s kickback scheme. Morgan resigned from the ODOC on Oct. 10, 2007; he has not been charged in connection with the investigation.

Monem Named in Prisoner Lawsuits

Both ODOC Director Max Williams and former director Dave Cook defended Monem’s purchasing program as a money saver; however, according to food industry experts, buying distressed food is virtually unheard of in corrections departments. Fifteen of 19 state prison systems that responded to a survey by The Oregonian reported they stayed out of the “spot” food market, sticking instead to more traditional bidding and contract procedures. Four other states allowed food liquidators to compete for their business, but with significant restrictions. Missouri, for example, reported that less than 1 percent of its prison food comes from the spot market.

Barbara Holly, past president of the Association of Correctional Food Service Affiliates and the former food service administrator for Alabama’s prison system, said it was highly unusual for prisons to buy distressed food. Alabama rules prohibited her from purchasing in the spot market. “It’s not a good practice and you sometimes end up losing more than you get because it’s usually just about to go out of date,” she said. “It leaves you wide open for lawsuits as far as inmates go.”

Not surprisingly, Monem and his food service practices were named in numerous prisoner suits – at least 19, according to a federal docket search. ODOC prisoner Douglas B. Bennett sued in July 2005, alleging that prisoners were being fed “expired, putrefied foods.” In support of his claims Bennett filed affidavits from eight prisoners, including kitchen workers, who had witnessed green bologna, sour milk, rotten fruit, moldy hamburger, discolored tomato paste and chicken that was thawed and rethawed, as well as a list of long-expired items such as ketchup, salad dressing, meats and fish. “Fred Monem,” Bennett wrote, “has been sending food to feed inmates ... that has expired or been marked ‘bait fish only’ or ‘not for human consumption, animal feed’ since 2002.”

Bennett’s lawsuit was dismissed on procedural grounds in January 2006, but Portland, Oregon lawyer Michelle Burrows, who frequently represents prisoners, has heard similar complaints. One prisoner sent her a list of food complaints and the label from a box of fish marked “bait,” said Burrows. “It was the inclusion of the box label that made everything else in the letter more credible.”

ODOC Director Williams insisted that “quality is not an issue” for prison food, while Cook likewise denied that ODOC prisoners were served inadequate or unhealthy meals as a result of Monem’s cost-cutting and kickback scheme. “You will have people, I’m sure, who will come forward and say, ‘Hey, we knew all along this food wasn’t appropriate’ or whatever,” stated Cook. “But that’s bunk.” He said he didn’t put stock in any of the prisoner lawsuits. “Inmates are going to complain, and inmates are going to sue, and that’s the real world,” he remarked.

Yet prisoners weren’t the only ones who raised questions about food quality. In 2002, officials at ODOC’s Eastern Oregon Correctional Institution (EOCI) investigated allegations that frozen hotdogs had expired dates on the wrappers. Nothing came of the investigation, and at the time Monem dismissed the allegations as nothing more than a product of past conflicts with EOCI staff.

Review Team Rates ODOC Prisoner Meals “Acceptable”

To his credit, ODOC Director Williams appointed an outside review team to assess the prison system’s food quality. The team consisted of Tom Issermoyer, a National Food Service Administrator with the Federal Bureau of Prisons; Eric Pippert of the Oregon Health Division; Dalton Hobbs, an Assistant Director with the Oregon Department of Agriculture; Mary Cluskey, Associate Professor at Oregon State University; and Darren Sisk, an Inspector with the U.S. Department of Agriculture.

The review team conducted its May 2007 evaluation by making unannounced visits at three of ODOC’s 15 prisons plus the Central Distribution Center. It also reviewed policies, conducted informal discussions with staff and prisoners, and sampled meals that were served at the facilities.

In a report issued in June 2007, the review team concluded that the “food purchased on the ‘spot buy’ program for consumption by inmates is of acceptable quality.” The team found prisoners were “provided with nutritionally adequate meals that are prepared and served in a manner that meets established health and safety codes.”Despite giving the prison food a passing grade, the review team made several recommendations – including regular inspections by Occupational Health and Safety (OHSA) personnel; implementation of a foodborne illness prevention program at all prisons plus “regular health and hygiene inspections of staff and inmates employed in the dining room”; increasing “the clarity of dietary symbols on menus and mak[ing] nutritional information available to inmates in the dining room”; creating “a realistic program for heart healthy eating”; using nutritional analysis by an independent dietitian; and developing standardized recipes, product specifications and menus to increase food service consistency across the state’s prison system.

A Year Later, Little Has Changed

More than one year later, few of the review team’s recommendations have been implemented. In a letter dated July 3, 2008, ODOC Director Max Williams stated the OHSA inspections, food-borne illness prevention program, nutritional analysis, and heart healthy eating program were all in progress but had not yet been put into effect.

The quality of prison food has not improved and in fact has reportedly worsened in some respects. The ODOC has had to deal with an embarrassing scandal involving one of their own, while Oregon taxpayers were socked with the bill for Monem’s years of defrauding the state.

Levene, Levin, Lawrence and Roth, who pleaded guilty, are scheduled to be sentenced on October 2, 2008. Karen Monem is set to go to trial the following week, on October 7. Meanwhile, Fred remains a fugitive with a federal bounty on his head – which leaves a bad taste in everybody’s mouth.

Sources: The Oregonian, Statesman Journal, Register-Guard, Associated Press, Frederick News-Post,

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Related legal case

United States v. Monem