Two Plead Not Guilty to Charges Stemming from Grain Scheme

09:20AM Jan 24, 2020
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( Darrell Smith )

SIOUX CITY, Iowa (AP) — Two former officers at a northwest Iowa agriculture cooperative have pleaded not guilty to federal fraud charges.

The Sioux City Journal reported that Kenneth Ehrp and Calvin Diehl entered the pleas Thursday in U.S. District Court in Sioux City. The charges: conspiracy to defraud the United States, and making false statements.

Prosecutors said the two directed Farmers Cooperative Society workers in Sioux Center from 2011 to 2017 to layer higher-value soybeans over oats in grain bins and in trucks and then concealed the scheme from customers and U.S. Department of Agriculture inspectors. The scheme led to the overvaluing of the co-ops grain inventory in order to influence a lender's action on a loan, prosecutors said.

The U.S. Grain Standards Act bars blending different grains unless the blend is designated as "mixed grain" or an exemption is granted by federal regulators.