Minnesota farmer gets prison time for organic grain fraud scheme

A federal judge in St. Paul sentenced a 66-year-old Minnesota farmer to three years in prison for falsely selling rail cars full of conventional grain as organic product.

"People looking at defrauding the organic sector in this way will have heard about [this case]," U.S. District Judge Kate Menendez said at a federal courthouse Monday morning.

James Clayton Wolf, a corn and soybean farmer in Jeffers, Minn., pleaded guilty in May to a scheme to defraud organic grain customers. While Wolf lost his organic certification in 2020, prosecutors said his scheme to sell genetically modified grain under false representation began years earlier.

Menendez noted that she was even an organic food consumer herself, saying the victims of organic grain fraud — though they couldn't individually be identified in this case — was anyone who participated in the specialized food system that requires different growing practices than traditional agriculture, including, generally, the absence of synthetic fertilizers.

The government had sought a five-year prison sentence for Wolf.

Prosecutors said they only uncovered Wolf's fraud — which began back in 2014 — because of a consolidation of the company from whom Wolf purchased conventional grain.

According to Assistant U.S. Attorney Robert Lewis, Wolf purchased genetically modified grain on rail cars and sold to an organic broker in Pennsylvania. Wolf represented the corn and soybeans as certified organic, which fetches a far more lucrative price than traditional grain.

Those organic grains, which are certified under a U.S. Department of Agriculture program, are often sold to livestock producers to feed cattle.

Prosecutors noted that consumers in the $11 billion organic industry seek environmental and health benefits in choosing organic food and the system is based on trust.

"Honesty has to be the standard," Lewis said.

Earlier Monday morning, Judge Menendez also sentenced Wolf's godson and nephew — Adam Clifford Olson — to two years of supervised probation and 100 hours of community service for signing a crop insurance document representing falsely that he understood Wolf's fields to be organically certified.

On Monday, attorneys said Olson was in the process of taking over his uncle's land when he was visited in October 2021 by federal agents who informed him that Wolf had lost his license for organic certification a year earlier.

"Adam trusted someone to tell the truth," Olson's attorney, Steven Wolter, told the court.

In his own brief remarks, Olson expressed remorse over his misrepresentation and the subsequent legal battle "because of the paper that I signed."

"I'm really sorry that it's come to this," he concluded.

Olson has already signed a check for nearly $70,000 in restitution to the USDA for the crop insurance, according to his attorney.

Wolf, meanwhile, will need to report to a federal prison by the middle of February. In brief remarks before the court, punctuated by tears, the farmer recounted his sorrow for his fraud and love of farming.

"I let the temptations to gain additional money overtake my good judgment," Wolf said.

Judge Menendez also finalized a forfeiture list encompassing many pieces of land, tractors and sports cars he used tainted funds to purchase.

Wolf's attorney, Paul Engh, had sought leniency, noting his client's failing health, but Judge Menendez said she believed Wolf would return from prison and resume farming.