Organic fraud case: What did it cost growers? - The Packer

Organic fraud case: What did it cost growers?

06/20/2012 03:44:00 PM
Coral Beach

As part of sentencing preparations for a man who admits to selling more than $6 million of fertilizer fraudulently labeled as organic to California growers, the Justice Department is accepting victim statements from growers.

Peter Townsley, former owner of California Liquid Fertilizer, admitted to selling the non-organic fertilizer in a plea agreement in February. He pleaded guilty to two counts of mail fraud for documents he mailed to the Organic Materials Review Institute.

He faces up to 20 years on each count, for a possible total of 40 years in prison, and maximum fines of $250,000 on each count. The judge has not set a sentencing date.

Assistant U.S. Attorney Susan Badger said federal guidelines require the judge to consider losses when deciding the sentence. The Justice Department and Townsley’s lawyer have filed briefs reflecting extremely different loss amounts.

Without having Townsley serve as a middleman, growers could have bought the non-organic fertilizer for about $1 million, the government contends. The growers paid Townsley more than $6.5 million, meaning their losses totaled about $5.5 million.

Townsley says the difference would have been only $700,000 to $1 million had he not been involved.

The judge is considering other losses, such as the effect the scandal had on individual growers as well as the entire organic sector.

Badger said she expects Miles McEvoy, head of the U.S. Department of Agriculture’s National Organic Program, to file court documents regarding industry effect and losses.

Badger said the U.S. Attorney’s office is collecting victim statements from growers who bought the fertilizer. The statements will go to the probation officer who is preparing a pre-sentencing report on the case, which will be submitted to the judge.

Growers can send statements to Badger’s attention at the U.S. Attorney’s Office, 450 Golden Gate Ave. 11th Floor, San Francisco, Calif., 94102.

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Mischa Popoff    
Osoyoos BC Canada  |  June, 21, 2012 at 02:31 PM

Why is it that whenever this story is covered there’s never any mention of the following two salient facts: -First, that it was the California Department of Food and Agriculture that cracked the case? -Second, that the CDFA did TESTING in their investigation of California Liquid Fertilizer? As a lifelong supporter of the organic industry, I predict that Miles McEvoy will discover many more cases of fraud as soon as he makes good on his 2-year old promise to begin unannounced field testing to ensure prohibited substances are not being used. With Peter Townsley, former owner of California Liquid Fertilizer, facing such a serious sentence for his organic fraud, you’d think now would be the time for McEvoy to make good and start across-the-board organic field testing. Otherwise, I’m afraid we face a near-complete free-for-all in the North-American organic sector.

Ian Freeley    
Oregon  |  June, 22, 2012 at 11:43 AM

The statement was made: "First, that it was the California Department of Food and Agriculture that cracked the case?" This is sort of true and sort of not. Yes, CDFA caught wind of something funky going on and poked around a bit. However, they did NOTHING about it. It wasn't until the Sacramento Bee newspaper made a public records request and publicized CDFA's lack of action that the wheels began to turn. The Sacramento Bee deserves way more credit than CDFA does.

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