FOR IMMEDIATE RELEASE                                         CRM
MONDAY, NOVEMBER 25, 1996                          (202) 514-2008
                                               TDD (202) 514-1888

                                 

             CONTINENTAL GRAIN AND AFFILIATE SETTLE
              MAJOR U.S. FRAUD SUIT FOR $35 MILLION



     WASHINGTON, D.C.--The U.S. Department of Justice and the U.S.
Department of Agriculture announced today that ARAB FINAGRAIN AGRI-
BUSINESS TRADING, LTD. [ARAB FINAGRAIN], a foreign-based affiliate
of Continental Grain Company [Continental] in New York, has pled
guilty in U.S. District Court for the District of Columbia to a
criminal information charging ARAB FINAGRAIN with conspiring to
defraud the USDA in connection with sales of agricultural products
to Iraq.  

     The plea agreement requires ARAB FINAGRAIN to pay a $10
million criminal fine.  In a related civil settlement, Continental
agreed to pay the United States an additional $25 million to
resolve the government's civil claims against Continental and ARAB
FINAGRAIN in connection with this investigation.

     The criminal information charges that ARAB FINAGRAIN
fraudulently participated -- through Continental -- in the USDA's
Export Credit Guarantee Programs, known as the GSM Programs. 
Through the GSM programs, which are funded by the Commodity Credit
Corporation [CCC], the USDA provides payment guarantees to
exporters which sell their goods on credit to importers in
designated countries.  The USDA established the GSM program to
expand foreign markets for domestic agricultural goods by reducing
the risk of doing business with financial institutions in
developing countries.  The criminal information charges that, from
1987 through 1990, ARAB FINAGRAIN caused Continental to register
for, and obtain, GSM export credit guarantees for sales of
agricultural goods -- specifically protein concentrate and soybean
meal -- to Iraqi government agencies.  The criminal information
charges that ARAB FINAGRAIN, a company organized under laws of the
United Kingdom, with offices in Geneva, Switzerland, and its joint
venture partner, used Continental to register these sales for the
GSM guarantees because ARAB FINAGRAIN -- which had no office or
presence in the United States -- was not eligible to participate in
the federally-backed program.

     Assistant Attorney General of the Civil Division, Frank W.
Hunger stated that, "this settlement -- one of the largest single
recoveries in the history of the USDA -- represents the Justice
Department's commitment to ferreting out fraud even in the most
complex cases involving international commercial transactions
guaranteed by the United States."

     USDA Inspector General Roger C. Viadero said that the criminal
plea and civil settlement bring to a successful conclusion a major
investigation by personnel from his office and attorneys of the
Department of Justice -- "this case exemplifies the excellent
working relationship we have with the Justice Department in our
mutual efforts to pursue difficult and sophisticated fraud
schemes."  Viadero also announced that ARAB FINAGRAIN, and certain
of its affiliated companies, had voluntarily agreed to no longer
participate, directly or indirectly, in any U.S. Government funded,
guaranteed, or sponsored programs or transactions.

     This case was investigated by the USDA's Office of Inspector
General Special Agents Arthur J. Wade and Marla M. Fricke and U.S.
Department of Justice, Criminal Division, Fraud Section Trial
Attorneys Nicole M. Healy and Clifford I. Rones, as well as Civil
Division, Fraud Section, Senior Trial Counsel Judith Rabinowitz and
Trial Attorney Laurie A. Oberembt.  For further information,
contact John Russell, U.S. Department of Justice, Office of Public
Affairs at (202) 514-2007 and Paula Hayes, U.S. Department of
Agriculture, Office of the Inspector General at (202) 720-6979.
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