Nebraska grain regulators refuse to reconsider $290K fine
The lawyer for a South Dakota grain company says they’ll appeal a decision by Nebraska regulators who refused to reconsider their $290,000 fine against the company for buying grain in that state without a license.
LINCOLN, Neb. — The Nebraska Public Service Commission on May 10, 2022, issued an order denying a “motion for reconsideration” of a $290,000 civil penalty against Banghart Properties LLC, of Gettysburg, South Dakota, for acting as a grain dealer in Nebraska without a license.
The PSC, which regulates grain trade in Nebraska, on March 15, 2022, had issued the civil penalty against Banghart, owned by Janice K. Banghart.
Agency officials then acknowledged it was largest fine of its kind of violation, according to the agency. Some PSC staff had recommended an $870,000 penalty, citing penalties per infraction and the knowing violation. The lawyers reduced the penalty.
The ruling to deny the motion also applies to “also known as” companies associated with Banghart's son, Jeremey Frost, including Fearless Grain Marketing Storage & Arbitrage,Fearless Grain Marketing, and Fearless Grain.
The company has 30 days to file an appeal about the commission’s decision.
Robert Konrad, of Pierre, South Dakota, an attorney both for Jeremey Frost and Banghart Properties LLC, on May 11, 2022, said his client will appeal and is anxious to present their case to a court.
Grounds for appeal would be that the Nebraska PSC has “abused their discretion by issuing a fine that is grossly disproportionate to other fines they have handed down in the past.” Konrad said the PSC failed to consider that no Nebraska farmer had lost any money — “not any even one dollar” — and that they “failed to account that any alleged violations were easy to correct” and that his client engaged in good faith efforts to correct it.
Further, Konrad said the fine is “punitive — a punishment — more than a fine to promote compliance.” He said Banghart Properties LLC continues to operate with grain licenses in South Dakota, Nebraska and Colorado.
Banghart is the mother of Jeremey Frost, of the Gettysburg/Onida area in South Dakota, who has headed the alias companies. Initially Banghart worked for Frost, but then switched roles after Frost encountered legal problems.
In a separate, but related matter, Frost since May 2021 has been involved in an arbitration action with the National Grain and Feed Association against Indigo Ag Inc, claiming over $100 million in damages, including potential stock valuations. Indigo Ag, meanwhile, sued Frost for $8.5 million in federal court for exceeding authority in committing farmers to deliver grain, among other issues. On Oct. 20,2021, U.S. District Judge Thomas L.Parker, in Memphis, ordered a separate trial to determine whether both parties agreed to dispute issues in arbitration.
The Nebraska PSC on Oct. 22, 2021, opened a complaint that requiring Banghart Properties LLC, to “cease and desist” all operations as a grain dealer in Nebraska.
The South Dakota Public Utilities Commission confirmed that Banghart Properties LLC had achieved a grain dealer’s license in June 2021, with the required $50,000 bond.
Frost, in an interview Oct. 26, 2021, Frost said FGM had difficulty operating in grain marketing since the Indigo lawsuit. He said he then worked for his mother, but didn’t manage her grain transactions.