BOISE - Bernard Saul, 58, of Bliss, Idaho, pleaded guilty today to wire fraud and money laundering, U.S. Attorney Wendy J. Olson announced. Bernard Saul waived his right to indictment and pleaded guilty to a two-count felony information filed by the U.S. Attorney. Yesterday, Roza Saul, 36, the wife of Bernard Saul, pleaded guilty to delivery of a misbranded food product. She pleaded guilty to a one-count misdemeanor criminal information filed by the U.S. Attorney.
According to the plea agreements, Bernard and Roza Saul were co-owners 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 agreements, from 2010 through 2015, Bernard 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, Bernard 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 agreements, from 2010 through 2015, Bernard 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. Bernard 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 agreements, for the years 2010 through 2015, Bernard 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, these customers paid higher organic alfalfa seed prices and were defrauded of $1,903,727.
According to the plea agreements, as a co-owner of Saul Farms, Roza Saul had responsibility and authority to prevent or correct a violation of the Federal Food, Drug and Cosmetic Act, which holds responsible parties strictly liable for introducing misbranded food products into interstate commerce.
Also, according to the plea agreements, Bernard Saul engaged in monetary transactions with the proceeds of the fraudulent sales. From 2012 through 2015, Bernard 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 charge of wire fraud is punishable by up to 20 years in prison, a maximum fine of $250,000, and not more than 3 years of supervised release. The charge of money laundering is punishable by up to 10 years in prison, a maximum fine of $250,000, and not more than 3 years of supervised release.
The charge of delivery of a misbranded food product is punishable by up to one year in prison, a maximum fine of $100,000, and not more than one year of supervised release.
Sentencing for Bernard Saul is set for June 7, 2016, before Senior U.S. District Judge Edward J. Lodge at the federal courthouse in Boise. Sentencing for Roza Saul is set for June 2, 2016, before U.S. Magistrate Judge Ronald E. Bush.
The case was investigated by the Federal Bureau of Investigation and the United States Department of Agriculture, Office of Inspector General.
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.