IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF IOWA EASTERN (WATERLOO) DIVISION UNITED STATES OF AMERICA, N0. 18-CR-2034 Plaintiff, INFORMATION vs. Count 1 18 U.S.C. 1343: Wire Fraud RANDY CONSTANT, 18 U.S.C. 981(a)(1)(C) Defendant. Forfeiture Allegation The United States Attorney charges: Count 1 Wire Fraud 1. At all times relevant to this Information: a. Individuals or entities wanting to produce or handle certi?ed organic, grain in the United States were required to obtain certi?cations through the United States Department of Agriculture?s National Organic Program (NOP). In accordance with. applicable regulations, NOP accredited third party certi?ers. The certi?ers then certi?ed operations .or farmers as being eligible to produce organic grain themselves or to handle organic grain produced by others. b. In order for grain to be certi?ed as organic, the grain must have been grown through approved methods and without the use of certain substances, including chemicals, and produced and handled in compliance with the Case Document 2 Filed 12/19/18 Page 1 of 11 NOP. This word include an organic plan agreed to by the producer or handler of such grain and approved by the third party certi?er. 0. Defendant owned and-operated Organic Land Management (OLM). OLM and defendant himself held certi?cations as organic producers (primarily for corn and soybeans) on certi?ed organic farms in Nebraska and Missouri. d. Defendant also co-owned and operated Jericho Solutions of Missouri, Inc. a/k/a Jericho Solutions. (Jericho), which operated primarily out of Ossian, Iowa, in the Northern District of Iowa. Jericho was in the business of selling and marketing grain labeled as organic to customers nationwide. e. OLM and defendant sold their certi?ed organic grain to Jericho as well as directly to third party purchasers. The Scheme to Defraud 2. Beginning no later than about 2008, and continuing through at least? about 2017, in the Northern District of Iowa and elsewhere, defendant and others known and unknown to the United States Attorney?s Of?ce intentionally devised-or made up a scheme to defraud others out of money, participated in a scheme to defraud with knowledge of its fraudulent nature, and devised or participated in a scheme to obtain money by means of material false representations or promises. In particular, defendant fraudulently represented or caused fraudulent representations to customers that grain being sold was certi?ed. organic because it had been grown as part of either his or certi?ed organic farms in Nebraska 2 Case Document 2 Filed 12/19/18 Page 2 of 11 or Missouri. In truth and fact and as defendant then well knew, at least 90% of the grain being sold was actually either entirely non-organic or a mix of organic grain and non-organic grain. In the course of the scheme to defraud, from 2010 to 2017 alone, defendant sold or caused the sale of more than $140 million in grain labeled and marketed as organic, and the vast majority of those sales were fraudulent. Execution of the Scheme to .De??aud 3. The scheme and arti?ce to defraud and obtain money by false pretenses was carried out, in part, as follows: 4. It was part of the scheme to defraud that defendant or his af?liates grew certi?ed organic crops (primarily corn and soybeans but also wheat) in Missouri and Nebraska under either defendant?s certi?cation or certification. Growing some certi?ed-organic crops allowed defendant or af?liated entities to provide certi?cations or representations to customers that grain being purchased came from those operations and was therefore organic when, in truth and fact and as defendant then well knew, the vast majority of the grain sold by the defendant was either non-organic or contained a mixture :of organic and non-organic grain. For'the years 2010 to 2017, defendant or OLM held certi?cations to grow organic soybeans and corn in the following amounts: 3 Case Document 2 Filed 12/19/18 Page 3 of 11 Nebraska Missouri (certified acres) (certi?ed acres) 2010' Corn: 1458.2 Soybeans: 333.9 Soybeans: 667.8 2011 Corn: 667.8 Corn: 333.9 Soybeans: 1458.5 2012 Corn: 1407.6 Soybeans: 333.9 Soybeans: 667 .8 2013 Corn: 1335.5 Corn: 155.1 Soybeans: 749.9 Sgybeans: 178.8 2,014 Corn: 978.4 Corn: 178.8 Sgybeans: 9.71.3 Soybeans: 190.8 5 2015 Corn: 1131.85 Corn: 190.8 Soybeans: 371.8 Soybeans: 288.4 2.016 Corn: 1227.65 Corn: 124.93 Soybeans: 371.8 Soybeans: 1196.95 2017 Certi?cation Surrendered Certi?cation Surrendered June 5, 2017 June 5, 2017 5. It was part of the scheme to de?'aud that defendant grew non~organic grain and purchased millions of dollars in non-organic grain from farmers throughout Nebraska and Missouri. Defendant purchased non?organic grain for agreed-upon prices. or, on other occasions, based the price paid to the farmer on the amount defendant or one of this entities was able to get for the fraudulently marketed grain. 6.. It was part of the scheme to defraud that defendant represented or caused representations to customers that grain being sold was certi?ed organic because either he or OLM had grown the grain being? sold. In truth and fact and as defendant then well knew, at least 90% of the grain being sold was either entirely non-organic or a mix of Organic and non-organic grain that he either grew himself or purchased from other farmers. Since at least 2004, at least 90% of the grain sold by - 4 Documentz Filed 12l19/18 Page4of11 defendant, OLM, or Jericho was non-organic either because the grain was non- organic grain'or because the grain was organically grown but was then commingled with non-organic grain, thereby depriving the grain of its organic character. 7.. It was part of the scheme. to defraud that defendant sold or caused the sale of a signi?cant amount of non-organic grain that was fraudulently marketed as organic. For the years 2010 to 2017, the scheme?s fraudulent sales of falsely marketed organic grain exceeded $140 million in gross sales and involved at least 10 customers nationwide. Defendant?s gross sales per year were, at a minimum, as follows: 2010 $16,508,569 2011 - $15,488,351 2012 7 $15,823,581 2013 $19,290,379 2014 ?5 $22,086,648 . 2015 $24,421,435 2016 $19,104,946 2017 $9,709,564 . $142,433,475 8. It was also part. of the scheme to defraud that defendant?s co-schemers would on at. least some of defendant?s certi?ed organic ?elds apply unapproved substances, including pesticides and nitrogen, which rendered the grain produced from these ?elds to be non-organic. Defendant knew that defendant?s co-schemers 5 Case Document 2 Filed 12/19/18 Page 5 of 11 would apply unapproved substances to grain that he would then fraudulently market and. sell as organic. Ems 9. For the purpose :of executing and attempting to execute the scheme and arti?ce to de?aud and to obtain money by means of false and fraudulent pretenses, representations, and promises, defendant caused to be transmitted by means of wire communication in interstate commerce signals to effectuate the transfer of funds from accounts held by purchasers of grain that he fraudulently marketed and sold as organic: to his personal account or the accounts of af?liated entities. Speci?cally, on February 10, 2017, defendant knowingly and fraudulently caused a Jericho customer to send a payment of $419,417.50 from its account in Sonora, California, via wire transfer to Jericho?s bank account in Luana, Iowa, in the Northern District of 10wa, for the purpose of paying for grain that was falsely marketed as organic. - 10. This was in violation of Title 18, United States Code, Section 13-4-3. Forfeiture Alleg? ation 11. The allegations contained in Count 1 of this information are hereby realleged and incorporated by reference for the purpose of alleging forfeitures pursuant to 18 U.S.C. 981(a)(1)(C) and 28: U.S.C. 2461(c). 12. Upon conviction of the offense in violation of 18 U.S.C. 1343 set forth in Count 1 of this information, defendant shall forfeit to the United States, pursuant to 18 U.S.C.. 981(a)(1)(C) and 28 U.S.C. 2461(c), any property, real or 6 Case Document 2 Filed 12/19/18 Page 6 of 11 personal, which constitutes or is derived from proceeds traceable to the offense. The property to be forfeited includes, but is not limited to, $128,190,128, and defendant?s interests in the following pieces of machinery or equipment: 1. 2. 10. '11. 12. 13. 14. 15. 2006 Peterbilt 379 semi truck, VIN 2015 Ford F-350 super-duty pickup, VIN 8940; 2011 Ford F-350 super-duty pickup, VIN 2010 Ford F-150 pickup, VIN John Deere Model 4730 Hicycle Self-Propelled Sprayer, Serial John Deere Model 8430 Row Crop 250HP Tractor, Serial John Deere Model 640F Combine Platform, Serial 55641 and 2014 MD. Product, Inc., Model 7604 42? Transport; John Deere Model 6120 Non-Chopping Corn HeadJCrockett, Serial John Deere Model 8130 Row Crop Tractor, Serial John Deere Model 9530 Crawler Tractor/Truck, Serial John Deere Model 1170 Planter, Serial John Deere Model 333-D Compact Track Loader, Serial John Deere Model 1990 Drill, Serial ?John Deere Model 640FD: Hydra?ex Draper Platform, Serial 20.12 MDP 42? Stud King Header Transport 7 Case Document 2 Filed 12/19/18 Page 7 of 11 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. John Deere Model 4700 Self-Propelled Sprayer, Serial 2012 Model 5273 38? Header Trailer; Bush Hog Model TD 1500 Tri-Deck 15? Finishing Mower, Serial #12- 00841; 1983 John Deere Model 4850 Row Crop Tractor, Serial John Deere Model 6430 Utility Tractor, Serial John Deere Model 8130 Row Crop Tractor, Serial John Deere Model 1990 Drill, Serial John Deere Model 1990 Drill, Serial John Deere Model 2210 Cultivator, Serial John Deere Model 4730 I-Iicycle Sprayer, Serial John Deere Model 60G Compact Excavator, Serial CJ 285006; John Deere Model 25:10 Applicator, Serial John Deere Model 1590 Drill, Serial John Deere Model 1790 Planter, Serial 17900735 525; 2006 John Deere Model 1293 Combine Cornhead, Serial 2008 John Deere Model 1770 Planter, Serial 30291; 2009 John Deere Model 64-30 Utility Tractor, Serial - 2009 John Deere Model 8530 Row Crop Tractor, Serial 188; 8 Case Documentz Filed 12/19/18 Page 8 of 11 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. .50. 2009 John Deere Model 8530 Row Crop Tractor, Serial . 2009 John Deere Model 9870 Combine, Serial 2010 John Deere Model 635 Combine Platform, Serial 20110 John Deere Model 635 Combine Platform, Serial 2010 John Deere Model 9870 Combine, Serial 367 08; 2010 John Deere Model 1790 Planter, Serial 2011 John Deere Model 2210 Cultivator, Serial 2011 John Deere Model DB60 Planter, Serial 2011 John Deere Model 9430 4WD Tractor, Serial 201 1 Unverferth 'Model 536 Transport, Serial 141; 2011 John Deere Model 706 Greenstar' GPS Yield Mapping, Serial 2011 John Deere Model 706 Greenstar Yield Mapping, Serial 2011 John Deere Model 706 Greenstar GPS Yield Mapping, Serial 2011 Jehn Deere Model 7 06 Greenstar GPS Yield Mapping, Serial John Deere Model 0907 Greenstar GPS Yield Mapping, Serial 10737; John Deere Model 0907, Greenstar Yield Mapping, Serial . Ohn Deere Model 0907 Greenstar GPS Yield Mapping, Serial 9 Case Document 2 Filed 12/19/18 Page 9 of 11 51. 52. .53. 54. 55. 56. 57. 58. 59. 60. 6.1. 62. 63. 64. .65. John Deere Model 0907 Greenstar GPS Yield Mapping, Serial 2011 John Deere Model 0492 Greenstar GPS Yield Mapping, Serial 2011 John Deere Model 0492 Greenstar GPS Yield Mapping, Serial 2011 John Deere Model 0492 Greenstar GPS Yield Mapping, Serial 2011 John Deere Model 0492 Greenstar GPS Yield Mapping, Serial 2011 John Deere Model 0909 Greenstar GPS Yield Mapping, Serial John Deere Model 0909 Greenstar GPS Yield Mapping, Serial John Deere Model 0909 Greenstar GPS Yield Mapping, Serial John Deere Model 0909 Greenstar GPS Yield Mapping, Serial 2012 John Deere Model 8680 Combine, Serial 165; 2012 John Deere Model-78680 Combine, ?Serial 2012 John Deere Model 328D Skid Steer Loader, Serial John Deere Model 333D Compact Track Loader, Serial 2013 John Deere Model 640 Combine Platform, Serial 20.13 Frontier Model 1015 Rotary/Flail Cutter, Serial 10 Case Document 2 Filed 12/19/18 Page 10 of 11 66. 67. 68. 69. 70. 17. 2012 John Deere Model 0499 AMS Autotrac System, Serial 2012 John Deere Model 0531 Greenstar Yield Mapping, Serial 2013 John Deere Model 333E Compact Track Loader, Serial 2015 John Deere Model 1990 Drill, Serial 60335; and 1994 Deere 7400 Row Crop Tractor, Serial If any of the property described above, as a result of any act or omission of the defendant: a. b. cannot be located upon the exercise of due diligence; has been transferred or sold to, or deposited with, a third party; has been placed beyond the jurisdiction of the court; has been substantially diminished in value; or has been commingled withother property which cannot be divided without dif?culty, the United States shall be entitled, to forfeiture of substitute property pursuant to Title 21, United States Code, Section 853(1)), as incorporated by Title 28, United States Code, Section 2461(c). PETER E. DEEGAN, JR. United States Attorney By: ls/ Jacob A. Schunk JACOB A. SCHUNK ANTHONY MORFITT Assistant United States Attorneys 11 Case Document 2 Filed 12/19/18 Page 11 of 11