A 45-year-old businesswoman accused of cheating farmers out of at least $27 million in proceeds from grain sales pleaded guilty to mail fraud in what prosecutors have said was the largest scheme of its kind in Missouri history.
Cathy Gieseker, of Martinsburg, pleaded guilty Tuesday in U.S. District Court in St. Louis to one felony count of mail fraud, and admitted to a multimillion-dollar grain fraud scheme. She faces up to 20 years in prison, up to $250,000 in fines, and restitution to victims at her sentencing Feb. 25.
Prosecutors said Gieseker, using a Ponzi scheme, defrauded 180 farmers out of at least $27 million in proceeds from grain sales she made on their behalf. They said Gieseker promised farmers returns 50 percent to 100 percent above market through nonexistent contracts with Archer Daniels Midland Co., but instead sold the grain at spot prices and used proceeds from some sales to pay inflated returns to some farmers.
The scheme, which began in October 2002, collapsed in February, and farmers were left with neither grain nor payments for their crops.
Gieseker, a former grain dealer and owner of a northeast Missouri trucking company, faced 15 state and federal felony charges.
Nanci Gonder, a spokeswoman for Missouri Attorney General Chris Koster, said Tuesday that the office is reviewing the federal plea and has started discussions with Gieseker's attorney about the possibility of her pleading to the state charges.
Gieseker's lawyer, Travis Noble Jr., said the defense was still weighing its options on the state charges.
Acting U.S. Attorney Michael Reap said Tuesday that as part of her plea agreement, Gieseker agreed to forfeit millions of dollars in cash and property derived from the illegal activity.
That includes five properties in Martinsburg and Rush Hill and 22 vehicles, including semi tractor trailers and ATVs.
Reap said in a statement that he hopes the farmers will take some comfort knowing Gieseker "has been called to account for such an outrageous breach of trust."
Noble has previously said his client was promised a certain amount of money for the farmers' grain from an unnamed buyer.
State regulators froze the assets and suspended the license of T.J. Gieseker Farms and Trucking in February after a Missouri Agriculture Department audit uncovered financial irregularities connected to the business. Gieseker, a widow, ran the business named after her late husband, Timothy.
The case led several state lawmakers to propose legislation in March that would have increased the minimum bonding requirements for licensed grain dealers and set criminal penalties for unlicensed dealers.
Lawmakers also considered creating an indemnity fund for farmers who lose money in speculative commodity markets, similar to accounts maintained in several other states. Neither measure passed the Legislature.
Associated Press writer Chris Blank in Jefferson City contributed to this report.