A Cottonwood County farmer admitted before a federal judge on Friday that he sold inorganic grain as a certified organic crop to an out-of-state buyer, pleading guilty to a single felony count of wire fraud.
U.S. Department of Justice attorneys first brought fraud charges last summer against James Clayton Wolf, 65, in a scheme to market conventionally grown crops as organic crops, which are far more lucrative. As part of a plea deal reached with Wolf, the southwestern Minnesota farmer is ordered to pay more than $19 million in restitution. He may also face years in prison.
U.S. District Judge Katherine Menendez said during Friday's court appearance in St. Paul that Wolf will be brought back for sentencing in "several months."
Wearing a simple olive polo and seated with his attorney, Paul Engh, for the nearly hourlong change-of-plea hearing, Wolf acknowledged he knew he was illegally defrauding Pennsylvania buyers in 2018 when he emailed them with an offer to sell them a corn crop.
"You knew it was fraudulent?" Menendez said.
"Yes, I did," Wolf said.
As part of the plea agreement struck with prosecutors, the farmer — who purchased property, vehicles and farm equipment with sales of the fraudulent grain — will be allowed to use impounded farm implements to plant and harvest his crops for the 2023 farming season. But he must split half of the proceeds from the sale of those crops with the federal government.
Initially, federal prosecutors brought multiple felony charges against Wolf, who they said reaped up to $46 million dollars from the fraudulent marketing scheme, selling non-GMO crops as organic crops to buyers. Certified organic crops generally are raised without chemical applications, such as herbicides. They also fetch a higher price per bushel.
Property that Wolf purchased with proceeds from the grain sales will now be used to pay down his $19 million bill to federal authorities. Custody of his farm equipment during the proceedings has been a point of contention for both sides.
Wolf has no prior criminal background. A separate case against a co-defendant continues.