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$140M organic food fraud is not a victimless crime

For the past couple of years, I've written stories about "fake" organic imports of grain that support a $50 billion U.S. organic food industry. So I was impressed that the Kansas City Star on Jan. 12 printed an admirable investigative journalism ...

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In December 2018, Missouri farmer Randy Constant, 60, pled guilty to a $142 million organic grain marketing fraud. He was sentenced in August 2019 in Cedar Rapids, Iowa, to 10 years in federal prison, but three days later killed himself with carbon monoxide. File photo taken in October 2018. (Mikkel Service/Agweek/Mikkel Pates)

For the past couple of years, I've written stories about "fake" organic imports of grain that support a $50 billion U.S. organic food industry. So I was impressed that the Kansas City Star on Jan. 12 printed an admirable investigative journalism piece on organic fraud, a story with Dakota and Minnesota connections.

Newspaper reporter Mike Hendricks of The Star chronicled the tragedy of Randy Constant , of Cillicothe, Mo., a town of about 9,500 about 90 miles northeast of Kansas City. Constant, nearly 61, killed himself with auto exhaust three days after being sentenced to 10 years in prison for organic fraud and being ordered to forfeit $128 million.

Constant had a classic start-high school football standout, chapter FFA president. An agricultural economics grad from the University of Missouri, Constant had worked for ADM, Scoular Grain Co., and in a seed company. In 1994, he returned to Chillicothe as an organic farmer and trader.

Constant was a church-goer, school board president, an admirable husband and father of four. It wasn't until later that he was revealed as a con man, using ill-gotten grain money to pay for sex with prostitutes in Las Vegas gambling trips and supporting three women with whom he'd had extramarital affairs.

In about 2000, Constant met Glen Borgerding, of Albany, Minn.. Back then, Borgerding managed a farm for a brokerage that sold organic soybeans to Japan. In 2001, Borgerding went into business with Constant in Organic Land Management LLC. Constant supervised OLM's operations in Missouri, Iowa and Nebraska. Bordering managed the company's operations in North Dakota and Minnesota.

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"We doubled our net worth every year until 2006, when we suddenly had a flat year," Borgerding said in the Star account.. But a lender pulled the plug in 2007. After they parted ways, Borgerding suspected Constant of diverting OLM grain into a separate company and selling more organic grain than OLM had been "tracking."

In 2007, a trade publication called "The Organic and Non-GMO Report," reported about a railcar full of soybeans that Constant sold to a company called Nevada Soy Product. The beans tested as coming from GMO plants-a no-no in the organic world. The U.S. Department of Agriculture investigated, but nothing came of it.

From then on, Constant stuck to conventional varieties, possibly sprayed in violation of organic rules, but undetected.Three Nebraska farmers and one in Missouri farmer pleaded guilty and were jailed for conspiring with him.

Federal prosecutors said Constant made more than $140 million in fraudulent sales between 2010 and 2017. In 2016, he sold 7% of all of the corn and 8% of all of the soybeans labeled organic, roughly $20 million a year. He was one of Successful Farming magazine's "10 Successful Farmers to Watch" in 2017. (Constant had used grain money to invest in Quixotic Farming LLC, a tilapia fish farm in a former Walmart store building, losing millions, according to The Star's account.)

Constant's defense attorney had argued no one was hurt financially in Constant's crimes. Consumers "enjoyed their meals, even if they paid more than they should have for them," he said.

But U.S. District Court Judge C.J. Williams, got it right when he concluded Constant had done "incalculable damage" to consumers and the organic food industry.

Related Topics: FRAUD
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