Soybean-Oat Spiking Scheme Lands Grain Manager in Federal Prison

Bookmark

A 76-year-old South Dakota man will serve three months in prison after lying to customers and federal inspectors as part of a scam to sell soybeans spiked with lower value oats.

Kenneth Ehrp, a former general manager at a grain warehouse in Sioux Center, Iowa, pleaded guilty to one count of conspiracy to commit a “prohibited grain practice,” the Justice Department said in a statement on Thursday. Along with the federal prison time, Ehrp must pay a fine and prosecution costs of about $54,100.

Even after one customer discovered and pointed out a spiked soybean batch, Ehrp told workers to remix the “slugged” loads and sell them to the same customer. Of 87,996 bushels of grain searched by U.S. Department of Agriculture officials, only 34,354 bushels of soybeans were found even though all the bins were certified as wholly containing the oilseed, according to the DOJ.

Soybeans, trading near the highest levels since 2014, currently fetch almost four times the price of oats.

Another person involved in the scheme was sentenced to three months’ imprisonment earlier this year.

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.