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Iowa Co-op Managers Indicted on Conspiracy to Commit Fraud

Two former officers of Sioux City, Iowa-based Farmers Cooperative Society - CEO and general manager Kenneth Ehrp, and assistant general manager Calvin Diehl - have been indicted on federal charges of conspiracy to commit fraud by blending oats into soybeans, and then hiding it from USDA inspectors from 2011 to April 2017.

Documents outline that the pair instructed employees to layer more valuable soybeans on top of cheaper oats in storage bins and in trucks, and to “blend oats at all times” into soybeans - a prohibited practice unless the grain is marked as “mixed grain” or unless the administrator of the Grain Inspection, Packers, and Stockyards Administration grants an exemption.

The two men also supervised workers that buried oats under soybeans in trucks for delivery, which were then discovered by the customer and rejected. Ehrp also led the cooperative’s comptroller to make false statements claiming the property was overvalued.

Each of the men were charged with conspiracy to defraud the U.S. Ehrp was also charged with two counts of making a false statement, and Ciehl was charged with one additional count of making a false statement.

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