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South Dakota man charged in organic grain fraud

The U.S. Attorney’s office charged Kent Duane Anderson with wire fraud and money laundering, alleging he sold non-organic grain and seeds falsely labeled as organic.

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Federal prosecutors say defendant falsely labeled non-organic grains and seeds as organic

Federal prosecutors have charged a South Dakota man in an organic grain fraud scheme.

The U.S. Attorney’s office charged Kent Duane Anderson with wire fraud and money laundering, alleging he sold non-organic grain and seeds falsely labeled as organic. Prosecutors say Anderson made $25 million from the fake organic sales between October 2012 and December 2017.

According to court documents, Anderson exploited the organic market by purchasing thousands of tons of small grain and seed products from non-organic suppliers and falsely representing them as organic and reselling them to wholesale distributors, brokers and other buyers at a higher price.

“As a result of this fraud, the defendant’s business enterprise generated large profits and he accumulated substantial wealth. This enabled him to live an extravagant lifestyle, which included his purchase of an $8 million yacht, a $250,000 sports boat, a $2.4 million residence, over $400,000 dollars of jewelry, and multiple expensive personal motor vehicles,” court documents said.

Prosecutors say Anderson carried out his fraud through a group of inter-related business entities in South Dakota that he directed and controlled and that he jointly owned with his wife, including several with “Green Leaf” in the name.

The defendant allegedly employed his sister-in-law and a college friend as “figurehead executives” and used them to apply for and obtain organic certifications from the U.S. Department of Agriculture.

Anderson pleaded guilty to the charges in federal court in Rapid City, South Dakota, on February 14.

Other organic grain fraud case

Five people have been sentenced in the largest known organic food fraud scheme in U.S. history. A Missouri farmer and businessman and his associates in Nebraska and Missouri were all charged last year in connection with the false marketing of $140 million worth of corn, soybeans and wheat as certified organic grains.

Randy Constant was sentenced to serve 122 months in federal prison, but he died by suicide four days before he was scheduled to report to prison.

Three Nebraska farmers who sold their crops to Constant and pleaded guilty to their roles in the scheme were given shorter prison terms.

Michael Potter, 41, was sentenced to 24 months in prison; James Brennan, 41, was sentenced to 20 months; and Tom Brennan, 71, was sentenced to three months.

Missouri farmer John Burton was sentenced to serve 22 months in prison for his role in the case, as well as forfeit more than $1 million in profits and pay a $100,000 fine. He pleaded guilty in May to one count of conspiracy to commit wire fraud.

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