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Justice News

Department of Justice
U.S. Attorney’s Office
District of Idaho

FOR IMMEDIATE RELEASE
Tuesday, June 7, 2016

Owner of Saul Farms Sentenced Bernard Saul to Serve 36 Months in Prison

BOISE -- Bernard Saul, 58, of Bliss, Idaho, the owner of Saul Farms, was sentenced today in United States District Court to 36 months in prison, followed by three years of supervised release, for the crimes of wire fraud and money laundering, U.S. Attorney Wendy J. Olson announced.  Senior U.S. District Court Judge Edward J. Lodge also ordered Saul to forfeit $1,903,727 and pay a fine of $7,500.  Saul pleaded guilty to one count of wire fraud and one count of money laundering on March 29, 2016. 

Saul’s conviction and sentence arose out of his misbranding conventional, non-organic alfalfa seed as “organic” alfalfa seed, which he then sold for $1,903,727 more than the seed was worth.  He did not tell his customers that they were actually purchasing conventional, non-organic alfalfa seed.  Saul’s wife, Roza Saul, pleaded guilty on March 28, 2016, to a one-count information charging her with delivery of a misbranded food product.  Roza Saul will be sentenced on June 20, 2016.

“Bernard Saul committed a basic fraud,” said Olson.  “Business people who misrepresent their product in order to make more money than their product is worth cheat both their customers and honest, fair businesses.  This sentence sends the clear message that owners of businesses who cut corners in this way will be punished, and will not be able to keep the proceeds of their crime.”

“The USDA OIG has the responsibility for protecting the integrity of the National Organic Program (NOP),” said Lori Chan, Special Agent-in-Charge, United States Department of Agriculture (USDA), Office of Inspector General (OIG), Western Region.  “OIG conducts investigations in each region of the U.S. to deter and uncover criminal activity that undermines the organic program.  Producers who engage in NOP fraud exploit the public’s trust by certifying agricultural products are organic when in fact they are not.  The OIG at USDA works to ensure the public agricultural products certified as organic are truly organic.”

According to the plea agreement, Saul was the co-owner of Saul Farms, marketing as Bliss Seeds LLC.  Saul Farms was located in Bliss, Idaho, and produced, handled, and sold alfalfa seeds labeled as “organic,” among other crops. 

Under applicable federal regulations, to be sold or labeled as “organic,” an agricultural product generally (i) must have been produced and handled without the use of synthetic chemicals, (ii) must not have been produced on land to which any prohibited substances, including synthetic chemicals, have been applied during the preceding three years, and (iii) must have been produced and handled in compliance with an appropriate organic plan.  Also, an entity that intended to sell or label agricultural products as organic first had to be certified as an organic producer or handler according to applicable regulations.

According to the plea agreement, from 2010 through 2015, Saul annually applied to the Idaho State Department of Agriculture and Nature’s International Certification Services for United States Department of Agriculture organic certifications to produce and handle organic alfalfa seeds on Saul Farms.  In the applications, and during site inspections, Saul represented that Saul Farms grew organic alfalfa seed on between 42 and 81 acres, and produced between 35,000 and 50,000 pounds of organic alfalfa seed per year.  During 2010 through 2015, organic alfalfa seed sold for more than one dollar more per pound than conventional, non-organic alfalfa seed.

According to the plea agreement, from 2010 through 2015, Saul purchased conventional, non-organic alfalfa seed from Andrews Seed, Quarter J Circle Farms, McClintick Farms, and United Seed Services in the following approximate amounts: 66,403 pounds for 2010; 304,891 pounds in 2011; 438,288 pounds in 2012; 545,182 pounds in 2013; 447,218 pounds in 2014; and 334,371 pound for the first nine months of 2015.  Saul knowingly and intentionally misbranded these seeds as “organic” alfalfa seeds, and sold them to customers Albert Lea, Kings Agriseeds, Blue River Hybrid, Byron Seeds, and Foundation Organic at the higher organic price and received the following payments:  $182,000 for 2010; $891,661 for 2011; $1,910,583 for 2012; $1,538,763 for 2013; $1,645,910 for 2014; and $921,520 for the first nine months of 2015. 

According to the plea agreement, for the years 2010 through 2015, Saul knowingly and intentionally did not disclose to the United States Department of Agriculture, Idaho State Department of Agriculture and Nature’s International Certification Services Saul Farms’ purchases of conventional, non-organic alfalfa seeds from Andrews Seed, Quarter Circle J Farms, McClintick Farms, and United Seed Services, and Saul Farms’ sales of alfalfa seed – represented as “organic” – to customers Albert Lea, Kings Agriseeds, Blue River Hybrid, Byron Seeds, and Foundation Organic.  As a result, Saul obtained $1,903,727 more from the customers than they should have paid.

Also, according to the plea agreement, Saul engaged in monetary transactions with the proceeds of the fraudulent sales.  From 2012 through 2015, Saul made the following purchases with the proceeds of the fraudulent sales: a 438-acre parcel of real property in Buhl, Idaho for $1,000,000; a 2012 Coachman Freelander recreational vehicle for $20,000 (partial payment); a 2014 Polar Kraft boat, engine, and trailer for $41,553; 2015 Dodge Ram 2500 Truck for $36,505; and a $90,000 cashier’s check. 

The case was investigated by the Federal Bureau of Investigation, the United States Department of Agriculture, Office of Inspector General, and Internal Revenue Service, Criminal Investigation Division.

Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations.  Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.  For more information on the task force, visit www.stopfraud.gov.

Topic: 
Financial Fraud
StopFraud
Updated June 7, 2016