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Case Number: 4:20-cr-00349-JAM
Judge: Jill A. Morris
Court: United States District Court for the Western District of Missouri (Jackson County)
Plaintiff's Attorney: United States District Attorney’s Office, Kansas City, Missouri
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Description: Kansas City, Missouri fraud crime criminal defense lawyer represented defendant charged with fraudulently selling non-organic grain as though it was organic.
A Chillicothe, Missouri, man was charged for his role in a $142 million scheme to sell non-organic grain as though it was organic.
Steven N. Whiteside, 57, was charged with falsely signing documents related to the fraud scheme. Whiteside pleaded guilty to making or giving a false official certificate or writing, a class A misdemeanor punishable by up to 12 months' imprisonment and a fine up to $100,000.
Randy Constant, also of Chillicothe, the leader of the fraud scheme, was sentenced on Aug. 16, 2019, to 10 years and two months in federal prison without parole in a related case that was prosecuted in the Northern District of Iowa. John Burton of Clarksdale, Missouri, and three farmers from Nebraska, all of whom who supplied Constant with non-organic grain, were also sentenced to federal prison for their roles in a scheme to defraud customers across the United States.
Constant admitted the fraudulent scheme involved at least $142,433,475 in grain sales, and the vast majority of those sales were fraudulent. From 2010 to 2017, Constant misled customers into thinking they were buying certified organic grain when the grain he was selling was not organic. Constant admitted falsely telling customers the grain he sold was grown on his certified organic fields in Nebraska and Missouri when the grain was not organic either because he purchased the grain from other growers, the certified organic fields were sprayed with unauthorized chemicals, or organic grain was mixed with non-organic grain. As part of the plea, Constant also agreed to forfeit $128,190,128 in proceeds from the fraudulent scheme.
Constant’s grain was mostly 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.
By pleading guilty today, Whiteside admitted that he signed a document on May 30, 2015, falsely claiming that he owned or farmed certain parcels of land when he actually had no affiliation or control of the property. Whiteside falsely attested in a Land Use History Verification that no chemicals had been used on the property in the preceding three years. The Land Use History Verification is a form used in conjunction with an application to have land certified as organic as part of the U.S. Department of Agriculture’s National Organic Program. In order for grain to be certified as organic, the grain must have been grown through approved methods and without the use of certain substances, including synthetic chemicals, and produced and handled in compliance with the program.
At the same time Whiteside signed the document, it was co-signed by Constant, who was identified on the document as the applicant seeking the certification for the land. In addition to being the identified applicant, Constant also purchased non-organic grain from Whiteside and employed Whiteside as part of Constant’s fish farm operation.
For purposes of calculating loss for sentencing purposes, the government agreed that any calculation should only include amounts related to Whiteside's grain sales to Constant or sales from grain grown on the land identified in the Land Use History Verification. The government agreed the loss calculation for Whiteside should not include other amounts, including amounts attributable to grain Constant purchased from other farmers, which comprised the significant majority of the $140 million loss figure.
This case is being prosecuted by Special Assistant U.S. Attorney Bradley Cooper. It was investigated by the FBI and the U.S. Department of Agriculture – Office of Inspector General.
Outcome: Defendant pleaded guilty.