Missouri Couple Charged with Fraud in $3.1 Million Grain Storage Scandal
A federal grand jury has indicted a husband and wife who own a grain storage company in northwestern Missouri, alleging that they conspired to victimize more than 100 farmers at an estimated loss exceeding $3.1 million by selling grain the farmers owned without paying them and by commingling and embezzling the farmers’ money. United States v. Froman, No. 11-06005 (W.D. Mo., filed April 21, 2011). The indictment alleges that “grain (primarily corn and soybeans), which was owned by various farmers who contracted with Gallatin Grain, was sold by the Fromans without the farmers’ permission and the proceeds of the sale were wrongfully withheld by the Fromans.”
Counts of conspiracy, mail fraud and bank fraud have been brought against both Daniel and Pauline Froman. Daniel has also been charged with one count of wire fraud and one count of interstate transportation of stolen property. Prison terms of up to 30 years and fines exceeding $1 million could be imposed if they are found guilty. Among other matters, the indictment alleges that the couple submitted a fraudulent statement to the Missouri Department of Agriculture, Grain Regulatory Services, overstating their accounts receivable and understating their accounts payable. The financial statement allegedly falsely reported an inflated net worth of more than $662,000 when they actually had a negative net worth of $936, which would have made them ineligible to maintain their grain dealer or warehouse licenses. See U.S. Attorney, W.D. Mo., News Release, April 21, 2011.
