FEDS SHIFT PROBE INTO CONTAMINATED FRUIT TO SAN DIEGO.

Byline: Stacy Finz Daily News Staff Writer

Federal investigators tracing the source of the hepatitis A virus that may have tainted 1 million pounds of strawberries focused their investigation Wednesday on a San Diego processing company as the possible point of contamination.

In addition, the firm has been targeted in a criminal fraud investigation, said Mary Ann Keeffe, acting undersecretary for the Food, Nutrition and Consumer Service of the U.S. Department of Agriculture.

Investigators are trying to determine whether Andrew and Williamson Sales Co. purposely duped the government into believing the berries imported from Mexico were grown in the United States so the company could participate in a USDA-subsidized school lunch program that buys domestic surplus fruit.

A&W admitted Wednesday that it had ``inaccurately described'' the strawberries to the USDA as being domestically grown. The fruit, in fact, was grown in Mexico, said officials from Epitope Inc., an Oregon company that purchased A&W after the strawberries were sold.

Nearly half a million pounds of the processed berries were purchased and distributed by the USDA to public schools all over the country - including 18 in the Los Angeles Unified School District - to be used in their lunch programs.

``They certified to us that the strawberries were American-grown, which is a requirement to participate in the program,'' Keeffe said.

The maximum penalty for making fraudulent statements to the federal government is five years in prison and a $250,000 fine.

Fred L. Williamson, the president and chief executive officer of A&W, resigned Wednesday amid the controversy, according to Epitope officials.

Williamson could not be reached for comment.

``We have notified the USDA of our concern with regard to this matter,'' said Adolph J. Ferro, president and CEO of Epitope. ``As the health and well-being of the public remains our foremost concern, we will continue to work with appropriate governmental agencies.''

Epitope has offered to pay for gamma-globulin injections for the 9,000 Los Angeles schoolchildren who last week ate fruit cups possibly tainted with the hepatitis A virus.

In the meantime, investigators from California Health Services visited the San Diego facility Wednesday to conduct tests.

``We're working with them, the Food and Drug Administration and the Centers for Disease Control, to determine whether hepatitis A came from the plant,'' said Matthew Kramer, vice president of Epitope, who flew to the San Diego company Tuesday from Oregon.

Officials from the CDC said they believe the berries were either tainted at the plant or in the Mexican fields. They said they have ruled out the possibility of contamination after the berries left the processing plant.

But Mexican officials pointed the finger at the United States.

Baja California Assistant Secretary of Agriculture Israel Camacho said he thinks it's likely that the strawberries were tainted ``during processing and packing rather than during cultivation.''

``There is an extremely rigorous procedure for handling fruit, and even more so when it is for export,'' added wholesale fruit dealer Ana Maria Laurino, a member of Mexico's National Strawberry Commission.

Meanwhile, strawberry growers Meanwhile, strawberry growers in California, who produce 80 percent of the U.S. crop, said the bad berries have resulted in canceled orders at a peak time in their growing season. One farmer said he lost $12,700 in cancellations Wednesday.

Epitope Inc.'s shares fell as much as 25 percent amid this week's concern. But health officials say there is no reason to believe fresh berries in the stores pose a threat.