The man who admitted to defrauding the organic industry by selling more than $6.5 million of his non-compliant Biolizer XN fertilizer begins a 364-day federal prison term Nov. 9.
U.S. District Court Judge Charles Breyer imposed the sentence Nov. 7. It includes a $125,000 fine and three years of probation following the prison term for the former owner of California Liquid Fertilizer.
For the first six months of that probation, Peter Townsley, 50, must live in a halfway house and perform 1,000 hours of public service in organic agriculture, preferably with community organic farming projects, the judge said.
The U.S. Attorney’s office in San Francisco had requested a 46-month sentence with three years’ probation and a $125,000 fine.
A federal probation officer recommended a one-year sentence based on interviews with Townsley and information presented in the case. The maximum sentence possible was 40 years in prison and up to $500,000 in fines.
“It’s important that Townsley got a fairly stiff sentence,” said Will Daniels, senior vice president of operations and organic integrity at San Juan Batista, Calif.-based Earthbound Farm, one of the victims of the fertilizer fraud.
“It should serve as a clear warning to those who would violate the regulations that organic integrity is strong and that justice will be served on perpetrators of organic fraud.”
Townsley admitted to mail fraud earlier this year in relation to the case.
In a plea agreement, Townsley admitted to knowingly changing the formula for his fertilizer and mailing annual statements to the Organic Materials Review Institute (OMRI) that said Biolizer XN met requirements for use in certified organic operations.
He said he knowingly sold the non-compliant fertilizer from April 2000 through December 2006, receiving gross revenue from it of between $6.5 million and $6.9 million.
Before imposing the sentence, Judge Breyer received comments from several interested parties, including Earthbound Farm; Tanimura & Antle, Salinas, Calif.; Miles McEvoy, deputy administrator of the National Organic Program; the California Department of Food and Agriculture; fertilizer company Advanced Marine Technologies, New Bedford, Mass.; and Peggy Miars, executive director of OMRI.
All of the comments stressed the ripple effect Townsley’s actions had on the organic industry because it raised doubts among consumers and undermined the public trust in the U.S. Department of Agriculture’s organic certification program.
The California Department of Food and Agriculture officials told the judge in their comments that Townsley’s scheme resulted in additional regulations in the state that annually cost the organic industry $400,000 in increased fees and testing.
In its request for a 46-month sentence, the U.S. Attorney’s office said that Townsley not only intentionally perpetrated the fraud, but that he continued to do so while ducking investigators. He further showed a lack of remorse by “backing away from what he admitted in the plea agreement” when he was interviewed by the federal probation officer, according to court documents.
“At any time, Townsley could have made the right choice and stopped selling Biolizer XN, but it is clear that he was motivated by one thing — greed,” the U.S. Attorney’s office said in its sentence recommendation.
The judge noted in an order related to the calculation of losses of victims in the case that “(the) defendant spends much of his briefing running away from his plea and the facts and evidence as presented in this case.”
Townsley submitted numerous letters from friends and family, including his elderly and ailing parents, which described him as law-abiding and remorseful. Townsley also said state and federal governments were partially to blame because they failed to effectively enforce organic certification regulations.