Money has begun to change hands between ConAgra and the U.S. government following the food product giant’s conviction of grain inventory tampering.
ConAgra has been the subject of a four-year investigation by the United States Department of Agriculture, leading to a plea agreement worth $11.4 million (Cdn). Criminal fines of $6 million make up the largest part of the penalties.
Three-quarters of a million dollars from the fund will form part of a payment of $3.9 million going to soybean producers in Indiana. Kentucky farmers will be paid $2 million, with $616,500 in compensation to the USDA for improper claims regarding grain storage.
Read Also
Agriculture ministers agree to AgriStability changes
federal government proposed several months ago to increase the compensation rate from 80 to 90 per cent and double the maximum payment from $3 million to $6 million
The settlements stem from several schemes to defraud farmers, grain buyers and the USDA that were used by Peavey Grain, Con-
Agra’s grain-buying country elevator division. In March the company pleaded guilty in an Indiana U.S. district court to charges relating to incidents in 12 of its 76 Peavey grain facilities between 1988 and 1992.
Soybeans were purposefully downgraded when purchased from the farmers, upgraded when sold to buyers and had water added to the grain to increase delivery volumes. The USDA also charged the company improperly weighed grain for delivery and provided gratuities to USDA licenced grain samplers who then allowed Peavey Grain elevator employees to substitute poor quality grain samples with better ones to defraud buyers with false grade certificates.
Weight added
Water systems used for adding weight to grain were found at numerous facilities in the U.S.
“While the company initially claimed the water was added to suppress dust, our investigators proved the true intent was to make more money,” said Roger Viadero, USDA inspector general.
Four ConAgra managers and two contracted, licenced grain inspectors also pled guilty to criminal wrongdoing in the case.
