Farmers face organic food fraud charges

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grain field
Midwest farmers convicted of fraudulently selling $142 million of grain as organic. Photo by LilacDragonfly from Pexels

The conviction of five Midwestern U.S. farmers of selling non-organic grains as organic intensified growing concerns over organic food fraud.

John Burton, a farmer from Clarksdale, Missouri, pled guilty, Friday, May 10, and was convicted on one count of wire fraud for fraudulently selling $142 million in organic grain.

According to the U.S. Department of Justice (DOJ) in a statement, Burton admitted that grain grown on non-organic fields was marketed and sold as organic along with the use of unapproved substances on certified organic grounds.

Ongoing investigation

Three additional farmers from Nebraska pled guilty and were convicted of one count of wire fraud in October 2018 as part of an earlier, broader probe by the United States Department of Agriculture – Office of Inspector General and the Federal Bureau of Investigation (FBI).

Tom Brennan, James Brennan, and Mike Potter, from Overton, Nebraska, all admitted to growing non-organic grain that they knew was being marketed and sold as organic.

According to the DOJ, from 2010 to 2017, each of the three farmers received more than $2.5 million for that grain.

All four plea deals are related to a case involving Randy Constant, owner of the grain brokerage firm, Jericho Solutions, located in Ossian, Iowa.

Constant, a resident of Chillicothe, Missouri, was convicted on December 20, 2018, of one count of wire fraud for fraudulently selling $142,433,475 worth of non-organic grain as organic.

According to the DOJ, Constant falsely told customers he sold grain grown on his certified organic fields in Nebraska and Missouri.

However, the grains were not organic because he either purchased them from other growers, sprayed certified organic fields with non-GMO substances, or mixed organic grain with the non-organic grain.

As part of his plea deal, Constant agreed to forfeit $128,190,128 in proceeds from the scheme.

The judge set sentencing for Constant, Tom Brennan, James Brennan, and Potter on August 16, 2019. Scheduled sentencing for Burton occurs after preparation of a presentence report, the DOJ says.

All five men face a maximum sentence of 20 years, a $250,000 fine, and up to three years of supervised release following any imprisonment.

Growing problem

A 2017 report by the Washington Post discovered weaknesses in the U.S. Agricultural Department’s ability to verify the chain-of-custody of supposed “organic” grains imported from Eastern Europe.

According to the paper, three shiploads, equating to “millions of pounds of ‘organic’ corn or soybeans,” entered the country during that period.

Those grains, designated as animal feed, have a direct impact on the authenticity of organic food. “Organic eggs, organic milk, organic chicken and organic beef are supposed to come from animals that consume organic feed, an added expense for farmers that contributes to the higher consumer prices on those items,” the Post says.

While a great deal of focus is on the import of fraudulent organic food, the conviction of the five Midwestern farmers indicates the problem is not just with imports but with domestic suppliers as well.

In a nod towards the problem, the Organic Trade Association recently rolled out a plan it had been developing for the past two years. Its Organic Fraud Prevention Solutions program is designed to fight fraud in the global system.

“Fraud in the global organic supply chain poses a significant threat to the integrity of the organic brand,” said Laura Batcha, CEO and Executive Director of the Organic Trade Association, in a statement. “For the past two years, the Organic Trade Association has prioritized significant time and resources into organic fraud prevention solutions. We are fighting fraud on many fronts, including through the 2018 Farm Bill and through private sector initiatives. The more companies that join this industry-driven program, the stronger the organic supply chain will be.”

The organization says the program is not a label, and it does not involve certification or verification. It is merely a quality assurance program in which organic businesses can voluntarily enroll to help minimize or eliminate organic food fraud both inside and outside of the United States.