After losing $45 million in employee fraud, Cargill sues insurance company that offered crime coverage
Cargill, the multi-national agribusiness company based in Minnesota, is suing an insurance company it says should have paid under a crime loss policy after Cargill lost $45 million in an employee fraud scheme. Two Cargill employees conspired with a vendor, Women’s Distribution Services, or WDS, of South Carolina, to overcharge Cargill for their own benefit.
MINNEAPOLIS — Agribusiness giant Cargill is suing an insurance company it says should have paid under a crime loss policy after Cargill lost $45 million in an employee fraud scheme.
Cargill filed the suit against National Union Fire Insurance Company of Pittsburgh on Nov. 24, 2021, in U.S. District Court in Minnesota.
Cargill, based in Minnesota, discovered the fraud scheme in 2016, at a time when it says it was covered by a crime policy through National Union Fire for up to $25 million.
Two Cargill employees colluded with the founders of Women's Distribution Service, also known as WDS, to overcharge Cargill, court documents say.
The Cargill employees were Michael Kennedy and Choung "Shawn" Nguyen. The WDS founders were Jennifer Maier and Brian Ewert.
Nguyen, Maier and Ewert pleaded guilty in 2019 to wire fraud. Kennedy was indicted for wire fraud earlier this year.
The indictment against Kennedy says money from the fraud was spent on lavish vacations by Kennedy and his family.
Cargill calculated the total loss from the scheme, which began in 2009, at $44.7 million.
But so far, the insurance company has yet to pay Cargill anything and the lawsuit says National Union is in breach of contract. It is seeking the $25 million limit that it says was covered by the crime policy as well as other damages.
In November 2019, Ewert, Nguyen and Maier were sentenced to 60, 41, and 24 months in prison, respectively, for defrauding Cargill.
The charges against Kennedy carry a maximum penalty of 20 years in prison and a $250,000 fine.
In an email, Cargill declined to comment on the case. National Union Fire could not immediately be reached for comment.
According to its website, Cargill has 155,000 employees in 70 countries in areas such as agriculture, food service and pharmaceuticals. Its headquarters are in Wayzata, Minnesota.