Organic fertilizer fraud ends with guilty plea

02/29/2012 05:57:00 PM
Coral Beach

Almost a dozen years after he began selling non-organic fertilizer to organic growers, the former president of California Liquid Fertilizer pleaded guilty to mail fraud, facing possible prison time and more than $500,000 in fines.

Peter Townsley, a 50-year-old Canadian citizen, entered the guilty plea Feb. 22 in Federal District Court in San Francisco. In a Feb. 28 news release, the U.S. Attorney’s Office in San Francisco said Townsley admitted to selling the Biolizer XN from April 2000 through December 2006, grossing more than $6.5 million from it.

Details of his plea agreement are not open to the public. Sentencing is scheduled for June 13. Townsley faces up to 20 years in prison on each count of two counts.

The U.S. Attorney’s Office announcement said the plea agreement was the culmination of a two-year investigation by the U.S. Department of Agriculture’s Office of Inspector General and the FBI.

However, as early as 2004, the California Department of Food and Agriculture knew about Townsley’s activities, according to a December 2008 article in The Sacramento Bee newspaper.

At that time, The Bee reported a former employee of California Liquid Fertilizer told state officials the company had been using ammonium sulfate in Biolizer XN. The substance is not approved for use in organic operations.

The California Department of Food and Agriculture forced the company to halt distribution of Biolizer XN two years after the employee contacted officials.

In early 2009, The Packer interviewed officials from the California agriculture department and organic produce company Natural Selection Foods LLC, San Juan Bautista, Calif., about the situation.

Jay Van Rein, a state agricultural department spokesman, said in 2009 the department’s inspectors were “immersed in the 2006 E. coli outbreak linked to spinach” when he was asked about the 2004 report from the former employee.

A spokeswoman for Natural Selection Foods LLC told The Packer in January 2009 that some of its 150 growers had used the non-compliant fertilizer. The company instituted a verification process almost immediately for growers using liquid fertilizers to ensure the integrity of its produce and reassure consumers.

Ultimately a federal Grand Jury indicted Townsley June 1, 2010, for mail fraud because he mailed forms to the Organic Materials Review Institute stating that Biolizer XN was made with fish, fish by-products, feathermeal and water, even though he had modified the formula to include aluminum chloride and later aluminum sulfate.


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Matt Moser    
Michigan  |  March, 01, 2012 at 09:16 AM

This whole situation calls into question many things about "organic" agriculture, especially in California. It took 2 years before CA officials could respond properly? Obviously it is a blow to the integrity of organic "certifications" and the organic industry. Since it is so difficult to be organic East of the MIssissippi River, I am an organic cynic and conventional methods proponent. The only real health issue here seems to be a mental health issue in that die-hard organic believers and proponents may have got their minds poisoned by the whole thing. In any case, the guy obviously did a lot of damage to the organic growers and industry, which I will admit is a very important market segment, even to a die hard "conventionalist" like me. He deserves a just punishment.

Chris Koger    
Lenexa, Kan.  |  March, 01, 2012 at 01:02 PM

Besides The Sacramento Bee, the mainstream press largely ignored this story when it came to light several years ago. Here is some of The Packer's coverage: http://tinyurl.com/Orgfert1 http://tinyurl.com/ORGFERT2 As far as we know, no company was barred from selling its produce as organic during or after this investigation. Chris Koger News Editor

john    
Watsonville  |  March, 01, 2012 at 10:19 AM

Does this mean the ground cant be organic again for three years or does the state turn the other way?

Jennifer    
Salinas  |  March, 01, 2012 at 04:31 PM

If I remember correctly the growers affected were given a pass, which doesn't seem true to the NOP Rules and consumer expectations. I'm with Matt in Michigan. I see nothing wrong with conventionally grown produce. Even Organic produce has pesticides sprayed on them.

Mar    
Fresno  |  March, 01, 2012 at 11:32 AM

So let me get this straight..for 8 years the Ca Dept of Food & Ag knew about this fertilizer being sold for organic crop use knowing it was fraud and never said anything until now..the consumer pays premium prices at the market for organic items..Shame on the Ca Ag Dept..no excuse for their poor performance

unknown    
Texas  |  March, 01, 2012 at 03:11 PM

Cali has to make money some how.

Mischa Popoff    
Osoyoos BC Canada  |  March, 03, 2012 at 12:16 PM

The key point missing from this story, and one which I talk about in my book, "Is it Organic?" is the fact that this organic-pretender was eventually caught because the California Dept. of Ag did a test to confirm synthetic ingredients were present in his "organic" fertilizer. There is a near complete lack of testing in the organic industry. Certification is honor-based and only a few states (Washington, Texas and Arizona for instance) require a test to ensure prohibited substances are not being used. Imagine the Olympics with athletes filling out paperwork to "prove" they're clean. Would anyone take that seriously? Miles McEvoy (the Deputy Administrator of the USDA's National Organic Program) says he will proceed with a plan requiring state and private certifiers under his watch to begin testing organic crops, livestick and processing facilities (including fertilizer plants) on a surprise basis. But so far he has done nothing. The concept of organic field testing was first proposed back in 1997, but the leaders of the organic industry lobbied it out of existence. No ownder there are charlatans out there like California Liquid Fertilizer, and no wonder the organic biz has grown so rapidly. You can learn more by visiting my website, www.isitorganic.ca.

John    
Peshastin Wa.  |  March, 05, 2012 at 02:11 PM

" I buy organic because there aren't any chemicals used." The number 1 answer to the question, "why do you spend extra money on organics." How sad is the misconception about this environmental mystery?

Marvin Greenberg    
Toronto, Canada  |  April, 05, 2012 at 10:13 AM

Is there strict inforcement of certified Organic growers? One organization for all Organic growers? One standard, one definition world wide? of course not! Fragmentation of unclear enforcement, in the meantime why not bury this guy from Canada up to his neck in his fertilizer at the border or send him through the proposed new pipe line to the Oil Sands of Alberta as a test to clean the pipe out!

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