In one of the largest cases of employee fraud against Cargill Inc., a former bookkeeper from upstate New York has been sentenced to five years in prison and ordered to pay $3.5 million in restitution.
Diane Backis, who had worked at Cargill's grain-shipping operations at the Port of Albany since 1986, pleaded guilty a year ago to skimming $3.1 million off grain sales and causing more than $25 million in additional losses to the Wayzata-based company. It was a scheme that went undetected for at least a decade.
Backis admitted to mail fraud and filing a false income-tax return over a plot in which she charged customers for animal feed at prices well below what her employer had paid and falsely recorded those sales at prevailing market prices. The entries made it look like the customers still owed money. In some cases, Backis directed customers to send payments directly to her, bypassing Cargill's corporate controls.
At a sentencing hearing Tuesday, U.S. District Judge Mae D'Agostino scolded the 51-year-old woman for the "insidious" scheme, calling Backis both "greedy" and "piggish," according to a release from the U.S. Attorney's Office in Albany, N.Y.
Cargill discovered the deception in 2016 while reviewing financial results for the facility in Albany, which operates one of the nation's largest grain elevators east of Mississippi and serves a five-state region.
The company worked with the Federal Bureau of Investigation, which conducted an undercover investigation. Cargill fired Backis on June 2, 2016.
The tax-fraud charge is related to Backis' 2015 individual tax return, on which she declared $61,208 in income, but omitted more than $450,000 she received that year by stealing Cargill customer payments, according to court records.
Claude Nebel, Cargill's vice president and chief security officer, wrote in an impact statement that Backis' action caused harm in ways beyond "tangible financial losses," including harm to its reputation and exposure to claims by third parties.