Home St. Louis Press Releases 2009 Owner of T.J. Gieseker Farms and Trucking Indicted on Federal Charges Involving Multi-Million Dollar Ponzi Scheme...
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Owner of T.J. Gieseker Farms and Trucking Indicted on Federal Charges Involving Multi-Million Dollar Ponzi Scheme

U.S. Attorney’s Office July 20, 2009
  • Eastern District of Missouri

ST. LOUIS, MO—Cathy M. Gieseker was indicted on multiple fraud charges including mail and wire fraud and interstate transportation of stolen property, involving a $27 million grain fraud scheme, Acting United States Attorney Michael W. Reap announced today.

Gieseker is charged with operating a “Ponzi” scheme whereby payments to farmers for grain sales were paid through monies gained through the subsequent sale of grain supplied by other farmers despite the fact that insufficient funds were generated to pay all farmers the promised rates.

According to the indictment, Gieseker operated a grain trucking and marketing company from her residence at 35424 Audrain Road 708, Martinsburg, MO. She was paid approximately .20 - .25 cents per bushel for transporting grain, and approximately .03 cents per bushel for marketing grain to grain terminals.

The indictment alleges that between October 2002 and February 2009, in addition to transporting grain, Cathy Gieseker began to market grain on behalf of farmers. In this capacity she quoted above-market prices to farmers and represented that she had contracts from Archer Daniels Midland Company (ADM) to guarantee the prices. During the course of this scheme, Gieseker delivered and sold virtually all of the grain at ADM. However, the indictment states that Gieseker did not hold contracts that guaranteed the above-market prices she had quoted farmers from ADM. Instead, she sold all of her grain at the “spot price” (local cash price for immediate settlement and delivery) and used the proceeds from subsequent grain transactions to pay the above-market prices she had previously promised other farmers. In this manner, Gieseker defrauded approximately 180 farmers out of approximately $27,000,000 - $50,000,000 in proceeds from grain sales she made on their behalf, with most of the proceeds going to pay other farmers who had previously been quoted above-market prices.

Beginning in 1993, Gieseker and her late husband, Timothy Gieseker, operated strictly as a trucking company and were paid for shipping farmers' grain to grain terminals under “T.J. Gieseker Farms and Trucking” and “T.J. Gieseker Trucking, LLC.” In 1993, as part of this trucking business, Gieseker obtained a Missouri Class IV Grain Dealer's License from the Missouri Department of Agriculture.

Missouri Class IV grain dealers are licensed as dealers primarily engaged in the trucking or transportation business, who as part of their business can buy and sell grain. Besides being required to maintain a minimum net worth, Class IV Dealers are required to make payment to the seller within thirty (30) days of delivery, or upon demand of the seller. These dealers can not issue minimum price contracts or any type of credit sales contract, including delayed price and deferred payment contracts. In addition, Class IV Dealers are not authorized to offer storage of grain for any of their customers.

“The FBI will continue to work with federal, state and local partners to go after perpetrators of such schemes whether it is on Main Street or Wall Street,” said John V. Gillies, Special Agent in Charge of the FBI in St. Louis. “Cases such as this should be a reminder that perpetrators of fraud schemes will take advantage of unsuspecting people who do not question something that is too good to be true.”

Gieseker, 45, Martinsburg, MO, was indicted by a federal grand jury July 16, on one felony count of mail fraud, one felony count of wire fraud, and one felony count of interstate transportation of stolen property. She is expected to appear in federal court today, in St. Louis.

Additionally, Gieseker is charged with a forfeiture count, wherein, if convicted, she will be required to forfeit cash and property derived from the illegal activity. Subject to forfeiture is four parcels of property in Martinsburg, MO; one property in Rush Hill, MO; twenty-two vehicles consisting of multiple semi tractors, trailers, vehicles and ATVs.

Each of mail and wire fraud carries a maximum penalty of 20 years in prison and/or fines up to $250,000, interstate transportation of stolen property carries a maximum of 10 years in prison and/or fines up to $250,000.

Reap commended the work on the case by the St. Charles Office of the Federal Bureau of Investigation, the Missouri Attorney General’s Office, the Missouri Department of Agriculture; and Assistant United States Attorney Matthew Schelp, who is handling the case for the U.S. Attorney’s Office.

The charges set forth in an indictment are merely accusations, and each defendant is presumed innocent until and unless proven guilty.

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