COUNSELOR’S CORNER The farming community enjoys a reputation for hard work, honesty and integrity. But as with any community, there are exceptions, and the category of “Farmers Engaged in Fraud” is one of those. Each of these stories took place in the last two decades. In most instances, the perpetrator had been a long-standing and respected member of his community. The fraud was uncovered only after it had persisted for years. In each case, the trail of victims hurt by the fraud was long. The perpetrators went to prison for their crimes. Understanding these cases can teach us how to spot or defeat fraud. Organic Grain Fraud – Missouri Farmer Passes off Ordinary Crops as “Organic” Randy Constant, a Missouri farmer, was considered the “mastermind” of this operation, but it involved at least five other farmers – including three from Nebraska – each of whom was sentenced to prison. The total damage caused by this group topped $140 million. (Per the press release, “Field of Schemes Fraud Results in Federal Prison for Leader of Largest Ever Fraud in U.S. History,” U.S. Attorney’s Office for the Northern District of Iowa [Aug. 19, 2019].) The concept was simple enough: certify and sell grain and other farm products as “organic” but raise them as you would any other crop – with chemicals, pesticides and inputs that are not permitted in organic certification. Because farm products certified as organic can bring better prices, greater profits provided the motive. And it can be difficult to determine if a particular product was grown organically, so detection of this scheme was difficult. Although Constant started with a modest “organic” operation, the scheme was so profitable that he enlarged it and recruited more farmers. Eventually, it encompassed some 3,000 acres and involved several farmers. The Century’s Largest Farm Frauds and What We Can Learn From Them Randy Wright, Baird Holm, LLP 18
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