U.S. Attorney's Office
District of Alaska
(907) 271-5071
January 21, 2015

Former Owner of Valley Dairy Sentenced to 30 Days in Prison for Lying to the USDA and Concealing Criminal Conduct of Dairy Co-Owner

ANCHORAGE—U.S. Attorney Karen L. Loeffler announced today that Karen B. Olson, of Wasilla, Alaska, was sentenced in federal court in Anchorage for making false statements to the United States Department of Agriculture (USDA) in connection with the construction and management of Valley Dairy, Inc., doing business as Matanuska Creamery, in Palmer, Alaska. She was also sentenced for concealing the criminal conduct of the former President and co-owner of the Dairy, Kyle E. Beus. Mr. Beus was recently sentenced to 60 days in prison for wire fraud and providing false statements to the USDA about his personal use of USDA grant funds intended for the construction of the Valley Dairy.

Karen B. Olson, 68, of Wasilla, Alaska, was sentenced on January 20, 2015, by U.S. District Court Judge Timothy M. Burgess to 30 days in prison and three years of supervised release. She was also fined $2000 and ordered to perform 250 hours of community service.

According to Assistant U.S. Attorney Retta Randall, who prosecuted the case, Olson was an investor in the Valley Dairy and in September 2008, its CEO. Between September 2008, and continuing through December 2008, in order to conceal the true nature of Valley Dairy finances and the losses to the Dairy caused by the illegal activity of Beus, Olson submitted false statements to USDA Rural Development to convince it to allow the State of Alaska to take a first lien position on equipment purchased with the proceeds of the USDA Valley Dairy grants. The documents submitted by Olson inflated the values of that equipment.

Prior to imposing sentence, Judge Burgess stated that the breadth and detail of the level of deceit practiced by Olsen was “frankly a little breathtaking.” Olson, a “bright, educated person,” “should have known better,” yet she was taking no responsibility for her actions. Olson blamed her “political enemies” for her presence in court. Judge Burgess pointed out to Olson that 12 members of the community came to a different conclusion about her conduct when they convicted her, and that only she was to blame for her pending incarceration.

Ms. Loeffler commends the U.S. Department of Agriculture, Rural Development, and the Federal Bureau of Investigation for the investigation of this case.

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