Attorney General Chris Koster has announced that he has filed 12 felony charges against Cathy Gieseker, a 45-year-old grain dealer from Martinsburg, who also ran a trucking company. The charges come five months after the State Agriculture Department moved to seize the assets of T. J. Gieseker Farms and Trucking Company after a routine agriculture audit disclosed discrepancies in Gieseker’s financial records.
Gieseker surrendered to federal authorities in St. Louis Monday morning and is being held on $190,000 bond. A federal grand jury indicted Gieseker July 16th on one felony count of mail fraud, one felony count of wire fraud and one felony count of interstate transportation of stolen property.
Both state and federal officials say Gieseker promised farmers above-market prices for their grain, often stating she had contracts with Archer Daniels Midland Company to guarantee the prices. The agreements often promised payment at some date in the future. Officials allege that, instead, Gieseker would pick up grain in one of her company’s trucks and sell it immediately for the cash price. She would use that money to pay off farmers she had promised payment to earlier.
The Missouri Attorney General’s office totals the scheme at $30 million. Federal authorities say the losses could run as high as $50 million.
Koster says it will be difficult to compensate victims for their losses.
"A Ponzi scheme has a way of destroying resources that enter the Ponzi scheme. This is essentially what has occurred here," according to Koster. "We’ll continue to try and identify any resources that may remain, but I don’t want to get people’s hopes up over this."
Koster is working with State Agriculture Director Jon Hagler who won’t go so far as saying this case could bankrupt some farmers.
"Well, I think that farm families, it would be difficult to speculate on individuals, but I think that you cannot overstate the impact this has had on farm families particularly in that area, but (also) across the state," Hagler says.
The state charges against Gieseker are five Class B felonies of stealing by deceit at least $25,000 from individual farmers, two Class C felonies of stealing by deceit for stealing at least $500 from individual farmers, three Class C felonies for making false records and withholding records from the State Agriculture Department, one Class C felony for filing a false financial statement with the State Agriculture Department and one Class D felony of unlawful merchandising practices for misrepresenting to farmers that she had contracts with ADM that guaranteed above-market prices for grain.
"This is a sad day for agriculture in Missouri and our hearts go out to the many farm families affected by this case," says Hagler. "The farm economy is built on trust. For centuries, Missouri farmers have relied on a firm handshake and a promising word. When the trust is broken, entire farm communities are affected. We will continue to work with Attorney General Chris Koster and his staff as this case moves forward."
The State Agriculture Department has announced that an administrative hearing will be held on the case Friday, August 7th, beginning at 10am at the Knights of Columbus Hall in Martinsburg. The hearing is open to the public. The hearing will help determine how the $297,000 bond Gieseker posted will be distributed among the victims.
For more information on grain i nsolvencies, visit the State Agriculture Web site .