NEW YORK, FEB. 8 -- A jury heard 6 1/2 hours of closing arguments today in a criminal trial in which two top Beech-Nut Nutrition Corp. executives have been charged with personal responsibility for the distribution of millions of jars of phony apple juice over a 4 1/2-year-period.
Assistant U.S. Attorney Thomas H. Roche in Brooklyn asked the jury to convict former president and chief executive Niels L. Hoyvald and former vice president John F. Lavery of all 450 felony counts in an indictment returned in November 1986. Beech-Nut, which was also charged in the indictment, pleaded guilty last year.
In today's arguments, the prosecutor said evidence never showed them "worrying about selling fake apple juice to babies," because their intent was to defraud. Instead, he argued, they worried about "bad publicity and profits."
"This is not the way we expect corporate executives in this country to operate," Roche said.
The jurors -- seven women and five men -- were not told that last Nov. 13, three days before Hoyvald and Lavery went on trial, Beech-Nut pleaded guilty to 215 counts in the indictment and agreed to pay a fine of $2 million, more than six times the largest previous fine under the Food, Drug, and Cosmetic Act of 1938.
The company said its plea was an acceptance of responsibility for acts of its employees and emphasized that it had taken prompt remedial steps to prevent a recurrence. The main indictment count accused Hoyvald and Lavery of having conspired -- particularly with suppliers of fraudulently labeled "pure apple juice concentrate" -- to intentionally ship the processed product.
Between December 1978 and March 1983, Beech-Nut shipped the bogus juice to 20 states (not including Maryland, Virginia or the District), and to Puerto Rico, the Dominican Republic, the Virgin Islands, the Bahamas, Saudi Arabia, Japan and Taiwan.
Hoyvald's attorney, Brendan V. Sullivan Jr. of Washington, asked for an acquittal, saying that the government had "fallen short by an enormous margin" of proving his client's guilt beyond a reasonable doubt.
He alleged that two key prosecution witnesses from Beech-Nut, Jerome LiCari, who was director of research and development, and Paul E. Hillabush, director of quality assurance, had "lied" in testifying that they had repeatedly warned that the concentrate was counterfeit. Roche denied the allegation.
Sullivan also said that Hoyvald's good-faith reliance for legal advice on four lawyers in two Washington law firms, after he learned of the bogus juice in June 1982, insulated him from conviction.
By contrast, Roche suggested to the jury that Hoyvald relied on the lawyers -- particularly Sheldon H. Klein and Richard Morey -- "to say 'yes' or 'no' to whatever Hoyvald wanted."
What Hoyvald wanted and got, the prosecutor said, was help in stalling the Food and Drug Administration after it learned of the fakery in 1982, enabling him to unload all but 20,000 of 700,000 cases of fake juice before a recall.
Hoyvald sold most of the inventory in the Caribbean. Roche said that Hoyvald, who claimed in testimony that he could have sold 25,000 cases of warehoused juice legally in California, trucked the lot to Galveston, Tex., and then shipped it to the Dominican Republic for sale at unprecedented discounts. Roche said Hoyvald heard the FDA's "hoofbeats" and wanted the juice out of the country.
Seeking Lavery's acquittal, Steven Kimelman argued that as a long-time salaried employee, he was "a man who had nothing to gain by commiting a crime."
The jury, which has been hearing evidence for nearly three months, will start to deliberate on Tuesday after being instructed by U.S. District Judge Thomas C. Platt.
Hoyvald, 54, joined the Ft. Washington, Pa., company in April 1980 and became president and CEO a year later. Lavery, 56, was in charge of manufacturing in Canajoharie, N.Y.