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Press Release

Grand Jury Indicts Former CEO/Owner of Valley Dairy for fraud related to State of Alaska Loans and USDA Grant Funds

For Immediate Release
U.S. Attorney's Office, District of Alaska

Anchorage, Alaska - U.S. Attorney Karen L. Loeffler announced today that a Wasilla woman has been indicted by a federal grand jury in Anchorage for defrauding the State of Alaska and for making false statements to the U.S. Department of Agriculture.

The six-count indictment named Karen B. Olson, 57, of Wasilla, Alaska, as the sole defendant.

The indictment alleges this offense occurred in connection with the construction and management of Valley Dairy, Inc., doing business as Matanuska Creamery, in Palmer, Alaska.  Olson is also charged with concealing the criminal conduct of Kyle E. Beus, the former President and co-owner of the Dairy, who was indicted in December 2012, and is currently awaiting trial.  

            According to the indictment presented to the grand jury, Olson, in September 2008, as an investor and the CEO of Valley Dairy, executed a scheme beginning in September 2008 and continuing through December 2008, to illegally obtain a $430,000 loan from the State of Alaska, Division of Agriculture, in order to conceal the true nature of Valley Dairy finances and the losses to the Dairy caused by the alleged illegal activity of Beus, the former co-owner and President of Valley Dairy. 

            Beus is alleged to have executed a scheme beginning in December 2007, and continuing through March 2008, to obtain money from the U.S. Department of Agriculture by submitting false documents in order to draw down the proceeds of two federal grants totaling $643,000 awarded by the USDA to support a milk, ice cream and cheese manufacturing facility in Alaska; Beus then allegedly converted part of the funds to his personal use.

            Olson is also charged with submitting false statements to the USDA Rural Development to convince it to allow the State of Alaska to take a first lien position on equipment purchased with the proceeds of the USDA Valley Dairy grants.  
Assistant U.S. Attorney Retta Randall, who presented the case to the grand jury, indicated that the law provides for a maximum total sentence of 30 years in prison, a fine of $1 million dollars, or both. Under the Federal Sentencing Guidelines, the actual sentence imposed would be based upon the seriousness of the offenses and the prior criminal history, if any, of the defendant.

The U.S. Department of Agriculture, Office of Inspector General- Investigations and the Federal Bureau of Investigation conducted the investigation leading to the indictment in this case.

An indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.
Updated January 29, 2015