CEDAR RAPIDS, IOWA, U.S. — A Missouri man will spend more than 10 years in federal prison after fraudulently selling millions of dollars of non-organic grain as organic grain.
Three Nebraska farmers who supplied the grain also were sentenced to federal prison in what the U.S. Attorney’s Office Northern District of Iowa is calling the largest organic fraud case in U.S. history.
Randy Constant, 61, was sentenced to 122 months on Aug. 16 in federal court in Cedar Rapids, Iowa, U.S. He admitted to the scheme, which involved more than $142 million in grain sales, most of which were fraudulent.
Sentences for the farmers involved in the scheme were: 20 months for James Brennan, 41; 24 months for Mike Potter, 42; and three months for Tom Brennan, 71, who the sentencing judge referred to as a “legitimate war hero” for his service in Vietnam. Each also was ordered to forfeit $1 million in proceeds from their crimes.
“Randy Constant and his co-conspirators lied to the American public and cheated thousands of consumers,” said United States Attorney Peter E. Deegan, Jr. “For years, Constant put personal greed and self-interest above all else. In doing so, he and his cohorts victimized thousands of people who were deceived into paying more for a product that they ultimately did not get. They also diluted the organic grain market to the financial disadvantage of organic farmers who were following the law.”
Inspectors with the U.S. Department of Agriculture said the ruling puts would-be fraudsters on notice that the government has zero tolerance for these actions.
“It should also serve as a warning to everyone growing, certifying, distributing, and selling organically certified products,” said Special Agent-in-Charge Anthony Mohatt of the U.S.D.A. Office of Inspector General. “Fraud will be vigorously investigated and prosecuted by the USDA Office of Inspector General, the U.S. Attorney's Office, and all its federal, state, and local partners.”
In his plea hearing, Constant said from 2010 to 2017 he misled customers into thinking they were buying organic grain from his certified fields in Nebraska and Missouri when in fact it was not organic. The grain actually was purchased from other growers, the certified fields were sprayed with unauthorized chemicals or the organic grain was mixed with non-organic grain.
As part of the plea, Constant also agreed to forfeit $128 million in proceeds from the fraudulent scheme, the U.S. Attorney’s Office said.
Evidence at Constant’s sentencing showed that, for 2016, his sales equaled approximately 7% of all comparable organic corn grown and 8% of all organic soybeans grown in the United States. Overall, from 2010 to 2017, Constant sold more than 11.5 million bushels of grain, over 90% of which was falsely marketed as organic.
Constant’s grain mostly was used as animal feed, primarily for chickens and cattle. That livestock was then sold as organic meat or products from the livestock were sold as organic products. Because of Constant’s fraud, most of the livestock that was fed his grain was not organic, causing thousands of consumers to purchase what they thought was organic meat for a premium price across the country, the U.S. attorney said.
The farmers involved in the case admitted during their respective plea hearings that they grew grain between 2010 and 2017 that was not organic, often because they had sprayed the grain with chemicals. Each further admitted that they knew the grain was being marketed and sold as organic, even though it was not in fact organically grown. Evidence at sentencing showed the three farmers worked together to produce and sell the grain to Constant.
Evidence further showed that, between the three farmers, they received more than $10 million from Constant in connection with the scheme and that the majority of the grain they sold to Constant was not organic.
Anyone with information about others involved in the scheme should contact the U.S. Attorney’s Office Northern Iowa, the USDA’s Office of Inspector General, or the Federal Bureau of Investigation.