South Dakota man indicted for $71 million organic grain fraud
Published: April 1, 2020
Category: Organic Fraud, The Organic & Non-GMO Report Newsletter
The second large-scale organic fraud case in the Midwest in under a year has highlighted ongoing concern.
Between 2012 and 2018, businessman Kent Duane Anderson deceived food distributors and brokers into believing his non-organic grains and seeds were organic. Fifty-year-old Anderson pocketed $11 million ($25 million profit) and purchased a multi-million dollar Florida home, an $8-million-dollar Italian yacht, $250,000 sports boat, and numerous luxury cars. Anderson faces multiple counts of wire fraud and conspiracy, and 29 counts of money laundering; he faces 840 years in jail and $27 million in fees if convicted.
“There will likely be more investigations and prosecutions [in organic industry],” said Erin Heitkamp of Minneapolis’ Pipeline Foods, an organic supply-chain company.
Organic market expert Ryan Koory noted the taint to the market brand. “What matters to organics is integrity, and your ability to believe in the product.”
Anderson created Green Leaf Resources in 2008 to market “certified organic” flax and canola seeds, meal and oils. He had two colleagues become certified organic handlers with USDA to “cover” the purchase of non-organic commodities from Cargill and Archer Daniels Midland; the commodities were shipped to a North Dakota warehouse where a worker replaced the non-organic documents with certified organic ones before shipping to wholesale distributors and brokers. The businesses made $71 million.
“Organic fraud can escape notice because regulatory oversight hasn’t kept up with the growth of the industry,” Heitkamp said.Top of FormBottom of Form
Source: Rapid City Journal; Star Tribune
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