By Trish Mehaffey, The Gazette
CEDAR RAPIDS — A Missouri man prosecutors say ran a “Field of Schemes” — ringing up over $142 million in sales by passing off grains as organic when most were not — was ordered last week to federal prison for more than a decade.
Three Nebraska farmers who supplied the non-organic grains also were sentenced to prison.
Randy Constant, 61, of Chillicothe, Mo., pleaded guilty last December to a count of wire fraud. He admitted the scheme involved about $142,433,475 in grain sales, the vast majority of which were fraudulent.
Constant also admitted he misled customers into thinking they were buying certified organic grain when the grain he was selling between 2010 to 2017 was not organic, according to court documents. He told customers the grain was from certified organic fields in Nebraska and Missouri but they actually were from other growers.
Constant made many of the sales through a brokerage called Jericho Solutions, which he owned in Ossian in northeast Iowa’s Winneshiek County, federal prosecutors said.
As part of the plea, Constant agreed to forfeit $128,190,128 in proceeds from the scheme.
Evidence at Constant’s sentencing shows his sales in 2016 equaled about 7 percent of all comparable organic corn grown and 8 percent of all organic soybeans grown in the United States.
Overall, from 2010 to 2017, Constant sold over 11 million bushels of grain, over 90 percent of which were falsely marketed as organic. Prosecutors said that’s enough to fill 3,600 rail cars or 14,375 semi-trailers.
Constant’s grain mostly was used as animal feed, primarily for chickens and cattle, according to sentencing information. That livestock then was sold as organic meat or products. But because of Constant’s fraud, most of the livestock fed his grain was not organic — causing thousands of consumers across the country to pay premium prices for what they thought was organic.
While customers were being gouged, court records indicate, Constant was spending freely on women and gambling.
Between 2010 and 2017, Constant went to Las Vegas more than 20 times, paying for flights, hotels, gambling and escorts.
He had sexual relationships with three women who lived in Las Vegas, and over the course of the fraud, paid two of them over $225,000 ostensibly to do work for his companies. But the women did "very little of value" for Constant’s companies, according to prosecutors.
Constant’s banking records also show over $360,000 in additional Las Vegas-related expenses during the scheme. About $110,000 of that was charged to a bank account Constant shared with one of the women and included payments for a vehicle, insurance, foreign travel and breast augmentation surgery.
The three farmers from Overton, Neb., who previously pleaded guilty to one count of wire fraud involving sales of grain to Constant, also were sentenced Friday. Tom Brennan, 71, was sentenced to three months; James Brennan, 41, to 20 months; and Mike Potter, 42, to two years in federal prison.
At their plea hearings, each man admitted to growing grain between 2010 and 2017 that was not organic. The farmers received over $10 million from Constant.
U.S. District Judge C.J. Williams called the scheme a “massive fraud, perpetrated on consumers over a long period of time” and said that Constant “caused incalculable damage.”
Williams, at the Nebraska farmers’ sentencings, ordered each to forfeit $1 million in proceeds from their crimes.
“For years, Constant put personal greed and self-interest above all else,” said a statement from Peter Deegan, the U.S. Attorney for the Northern District of Iowa in Cedar Rapids. “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.”
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