U.S. Attorney's Office
Eastern District of Virginia
(804) 819-5400
July 2, 2014

Former Kellogg Salesman Pleads Guilty to Wire Fraud Charge

RICHMOND, VA—John Morrell Palmer, III, 55, of Fredericksburg, Virginia, pleaded guilty today to Conspiring to Commit Wire Fraud. Dana J. Boente, United States Attorney for the Eastern District of Virginia;Colonel W. Steven Flaherty, Virginia State Police Superintendent; Gary Barksdale, Inspector in Charge of the Washington Division of the United States Postal Inspection Service; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by United States District Judge M. Hannah Lauck.

Palmer faces a maximum penalty of 20 years in prison when he is sentenced on October 2, 2014, by Senior United States District Judge Robert E. Payne. In a statement of facts filed with the plea agreement, Palmer admitted that from 2009 through 2013, he conspired with an unindicted co-conspirator, the President of an unnamed grocery retail chain, to submit fraudulent documents to The Kellogg Company and SuperValu, a grocery wholesaler through which Kellogg sold product to retailers. SuperValu awarded the grocery retail chain approximately $1.8 million in deductions against its running account with SuperValu as a result of the fraudulent submissions. Kellogg reimbursed SuperValu for the awarded deductions. The unindicted co-conspirator paid cash to Palmer in the total amount of approximately half the value of the fraudulently obtained deductions. This case was investigated by the Virginia State Police, the United States Postal Inspection Service, and Federal Bureau of Investigation. Assistant U.S. Attorney Michael C. Moore is prosecuting the case on behalf of the United States.

A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.

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