UPDATED:Former Adams Produce CEO sentenced to 16 months in prison

10/30/2013 08:51:00 AM
Coral Beach

For additional background on Scott Grinstead’s sentencing, please see “U.S. Attorney has new evidence for Grinstead sentencing”

(UPDATED COVERAGE 1 p.m.) The former chief executive officer of Adams Produce Company has been sentenced to serve 16 months for his guilty plea related to fraud and other federal criminal charges.

U.S. District Court Judge Karon Bowdre sentenced Scott Grinstead during a hearing Oct. 29 in Birmingham, Ala., according to court documents. She imposed the sentence suggested in a pre-sentence investigation report from federal prison officials — 16 months for wire fraud and failing to report the felony fraud scheme when he became aware of it, and 12 months for failing to file personal income tax returns for two years.

The 16- and 12-month sentences are to be served concurrently. Grinstead is free on bond until Jan. 9, when he is required to surrender for imprisonment.

After serving his time, the judge ordered Grinstead to be on supervised release for 36 months with special restrictions. The restrictions were not fully detailed in the judge’s docket entry. He is also required to do 20 hours of community service.

The U.S. Attorney based in Birmingham, Joyce Vance, said in a news release that Grinstead deserved prison time and that she was glad he paid $450,000 in restitution.

“This defendant, while CEO of Adams Produce, allowed officers and employees to continue cheating the government on contracts involving military bases and schools while, at the same time, he continued to steal from the company,” Vance said in the release.

“Prison is deserved punishment for his criminal acts, which harmed the government and his company, but we also are pleased that resolution of this case will bring some compensation to the employees who lost their jobs and did not receive their final paychecks from Adams Produce.”

The assistant U.S. Attorney who handled the case, George Martin Jr., had recommended Grinstead spend 33 months in prison and three years on probation. The maximum possible sentence was 25 years and $700,000 in fines.

Grinstead had requested home arrest at his family’s Florida beach house for 14 months.

Grinstead is one of five Adams Produce officials charged in relation to the fraud scheme that generated several hundred thousand dollars illegally from the sale of produce destined for military and school foodservice programs. Grinstead and three of the others charged negotiated plea agreements and pleaded guilty to federal crimes.

The fifth company official, former general manager Michael O’Brien, is scheduled for a status hearing Nov. 14 in federal court. O’Brien’s duties at Adams Produce included determining the prices the company charged the U.S. for fresh fruits and vegetables. Adams bought the produce from TLC, Marietta, Ga., according to a news release from the U.S. Attorney’s office.

The other former Adams officials who have already pleaded guilty in the case are purchasing director David Kirkland, purchasing program specialist Christopher Pfahl and Stanley Joel Butler II, who was a purchasing agent.

Grinstead negotiated his plea agreement in late January after the government filed charges of wire fraud, failing to report the felony conspiracy scheme and two counts of failing to file tax returns. The former CEO agreed to plead guilty and to pay $450,000 to help offset wages left owing to 400 Adams Produce employees when the company unexpectedly closed in April 2012.

Butler is scheduled to be sentenced Dec. 12. Kirk is set for sentencing Dec. 19. Pfahl is scheduled to be sentenced Jan. 14, 2014.



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