Gibson City Man Convicted Of Mail Fraud And Tax Evasion
Peoria, Ill. – Sentencing is scheduled on Feb. 19, 2015, for a Gibson City, Ill., man convicted last week of mail fraud and illegal application of a pesticide inconsistent with its labeling. A jury deliberated for approximately one hour on Oct. 31, before returning guilty verdicts against Carl Kieser, 61. Kieser had previously been convicted of four counts of tax evasion.
Kieser owned and operated Aquatic Control of Illinois, a business located at his Gibson City Fishing and Camping Club, south of Gibson City on Route 47. During the trial, which began on Oct. 27, the government presented evidence to establish that from June 2006 to September 2012, Kieser purchased large quantities of Diuron 80DF, a pesticide registered with the U.S. Environmental Protection Agency for the control of land-based weeds. The EPA-approved labeling for Diuron 80DF warns that the chemical should not be applied directly to water due to its toxicity to fish and other aquatic wildlife.
As part of the scheme to defraud, Kieser manufactured, advertised, sold, and distributed a product he called Pond Clear Plus. Kieser produced Pond Clear Plus by mixing Diuron 80DF with other ingredients, including a blue pond dye. Kieser advertised Pond Clear Plus in newspapers and magazines and represented that he had 20 years of experience in lake management and consulting. The advertisements for Pond Clear Plus falsely and fraudulently represented that Pond Clear Plus could control lake weeds and algae “Mother Nature’s Way,” with “No Chemicals,” using a “biological method with live bacteria that dissolves plant nutrients, black muck, and rotten egg odor.” Kieser also falsely and fraudulently represented to customers that Pond Clear Plus contained no chemicals. In fact, as Kieser knew full well, Pond Clear Plus contained the chemical pesticide Diuron 80DF, which was prohibited by its EPA-approved labeling from being applied directly to water.
As a result of his false advertising and representations, Kieser sold and distributed Pond Clear Plus to customers from approximately July 2007 to September 2012. Kieser obtained more than $400,000 in proceeds from customers from the sale of Pond Clear Plus, but failed to pay any federal income tax on his profits from 2008 to 2011.
As a further part of the scheme, Kieser provided Pond Clear Plus to his customers via Federal Express or some other means in 2.5 gallon jugs without any labels, including any labels informing customers that Pond Clear Plus contained Diuron 80DF and should not be applied directly to water. To the contrary, Kieser advised customers that Pond Clear Plus contained no chemicals and should be applied by pouring it directly into the customer’s pond or lake. Moreover, Kieser himself on occasion directly applied Pond Clear Plus to lakes or ponds for his customers. As a result, Diuron 80DF was directly applied to ponds and lakes throughout the United States in direct contravention of its EPA-approved labeling. Additionally, multiple customers experienced fish kills following the application of Pond Clear Plus to their ponds and lakes.
“The guilty verdict is the result of strong coordination between EPA and our law enforcement partners,” said Randall Ashe, Special Agent in Charge of EPA’s criminal enforcement program in Illinois. “Mail fraud is a serious crime that can lead to serious public health threats. This case demonstrates that individuals who profit from the misuse and illegal sale of potentially harmful chemicals will be prosecuted.”
Following the jury’s return of the guilty verdicts, Chief U.S. District Judge James E. Shadid allowed Kieser to remain on release under conditions of bond, including that he no longer sell his product, Pond Clear Plus. Judge Shadid scheduled sentencing for Kieser on all charges for February 19, 2015.
The maximum statutory penalty for each count of mail fraud is 20 years in prison and a fine of up to $250,000. The maximum statutory penalty for tax evasion is five years in prison and a fine of up to $100,000. The maximum statutory penalty for applying a pesticide inconsistent with its labeling is one year in jail and a fine of up to $50,000.
The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller. The charges are the result of an investigation by the U.S. Environmental Protection Agency, Criminal Investigation Division, and the Internal Revenue Service, with the assistance of the Illinois Department of Natural Resources, the Illinois Environmental Protection Agency, and the Illinois Department of Agriculture.