Missouri farmers caught up in the in the Missouri grain fraud case got little relief last week, August 7, 2009, following an administrative hearing for the case.According the Associated Press report, which can be accessed at CNBC.com, Deparment of Agriculture officals reported that the majoriy of the 180 farmers who lost roughly $27 million in the scheme will only receive payments equivalent to 2% of their total claims. State agriculture director John Hagler was dissapointed in the ruling, and stated in the AP article that "'This is a sad day for Missouri agriculture . . . Our farm economy is built on trust. when that trust is iolated, the entire communities are harmed."'
Cathy Gieseker is accused of operating the largest grain fraud scheme in Missouri history. She currently is facing 15 federal and state felony charges. Gieseker is a grain dealer and owns a trucking company in northeast Missouri.
Gieseker is accused of promising farmers returns between 50 and 100$ above the market through contracts, ultimately found to be non-existant, with Archer Daniels Midland Co. According to the Associated Press story Gieseker, "instead sold grain at spot prices and used proceeds from other grain sales to pay inflated prices to some farmers, the indictment alleges. Others earned nothing in what authorities call a classic Ponzi, or pyramid, scheme."
During the 30 minute hearing no testimony from affected farmers was taken. While it would not be enough to cover all the losses, additionaly money could be recovered from seizing Gieseker's assets. To read the AP story click here. To read a previous US Agriculture and Food Law and Policy blog post click here.
Posted: 08/10/09
