Fourth prison term ordered in Adams Produce fraud

04/10/2014 12:32:00 PM
Coral Beach

The former general manager of the Adams Produce Inc. distribution center must serve seven months in federal prison for his role in a scheme to defraud the government by overcharging for fresh produce for schools and the military.

Michael O’Brien could have been sentenced to five years under federal law. Federal Judge Sharon Blackburn imposed three years supervised release following O’Brien’s prison time. She also ordered him to pay $481,000 “jointly and severally with the coconspirators,” according to court records.

O’Brien is the fourth official from the defunct Birmingham, Ala., produce company to be sentenced to serve prison time for federal criminal charges related to a 2011 double-billing scheme. The U.S. Justice Department requested a sentence of one year and one day. He requested probation, saying he didn’t benefit from the scheme and, in fact, lost money because of it.

From August to December 2011, O’Brien and other managers at the company conducted 82 fraudulent transactions with the U.S. government, according to the Justice Department. As general manager of the company’s distribution center in Pensacola, Fla., O’Brien helped hatch the scheme and suggested names for a fake company set up to hide the deal, according to court documents.

O’Brien worked with the company’s chief executive officer Scott Grinstead, who is sentenced to 16 months in prison, and purchasing director David Kirkland, who is sentenced to serve one year and one day. O’Brien and Kirkland “were the primary actors in the day to day operation of the scheme and both stood to benefit personally from it through the opportunity for performance-based bonuses,” according to the Justice Department.

His attorney painted a very different picture in O’Brien’s request for leniency.

“In some ways he was a victim in this whole Adams event as he suffered a financial loss of nearly $150,000 for not being reimbursed for loss of a lease O’Brien was obligated for that Adams had agreed to pay and payment to vendors by O’Brien out of his own pocket when Adams Produce lost its credit with them,” according to O’Brien’s sentence request.

O’Brien, Kirkland, Grinstead and two other former Adams Produce employees all pleaded guilty and negotiated plea agreements with the government. The investigation into the scheme is ongoing, according to the Justice Department.

The others who have pleaded guilty:

Christopher Pfahl, a purchasing program specialist, is set to be sentenced April 22; and

Stanley Butler, a purchasing agent, is sentenced to serve three and a half months in prison followed by three years’ supervised release.



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Sean Barton & Larry Redman Sygma Nogales Az    
Nogales Az.  |  April, 10, 2014 at 04:25 PM

This comment has been deleted.

eugene    
Daphne Alabama  |  April, 12, 2014 at 01:13 PM

Way to short of sentence. Most of there small suppliers , including a lot of my friends have yet to be paid.

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