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.
Townsley was apprehended at Los Angeles International Airport Oct. 9, 2010, while he was en route from Mexico to Canada. He was released on Oct. 12, 2010, and remained free after the bail was increased on Oct. 15 to $350,000.
A superseding indictment filed July 7, 2011, charged Townsley with one count of conspiracy to commit mail fraud and seven counts of mail fraud. He pleaded guilty to two counts of mail fraud, admitting to sending the OMRI renewal forms for Biolizer XN in 2005-06 that included untrue statements.