SIOUX CITY -- A second former officer at a Sioux Center, Iowa, ag cooperative will serve time in prison for his role in a grain-blending scheme and filing false reports to conceal it.
Kenneth Ehrp, 76, of Dakota Dunes, was sentenced Wednesday in U.S. District Court in Sioux City to three months in prison. He pleaded guilty in November to one count of conspiracy to defraud the United States. He also was fined $50,000 and will be on supervised release for one year after completing his prison sentence.
Calvin Diehl, of Aberdeen, South Dakota, was sentenced in February to three months in prison on the same charge.
Ehrp, who was the general manager, and Diehl were charged with the scheme, in which Farmers Cooperative Society workers blended lower-value oats into soybeans and then sold the mixture as soybeans. They also layered soybeans over oats in grain bins and in trucks and then concealed the practice from customers and U.S. Department of Agriculture inspectors in order to deceive them about the quality and quantity of the grain they were selling and storing.
Federal law prohibits grain blending unless the blend is designated as "mixed grain" or an exemption is granted by federal regulators.
After learning of the scheme, a USDA search of grain bins at the co-op’s Iowa and South Dakota locations revealed that of the estimated 87,996 bushels of grain in the bins, they contained only 34,354 bushels of soybeans, though all the bins had been certified as soybeans.