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Arrest made in fertilizer, fraud case

Published on October 15, 2010 3:01AM

Last changed on November 12, 2010 8:20AM

Staff report

The president of a former California company has been arrested in connection with a case in which the company allegedly sold a fertilizer that contained synthetic material as organic.

Peter Townsley, 49, of British Columbia was arrested Oct. 9 at Los Angeles International Airport on eight counts of mail fraud, two counts of making false statements, and conspiracy to commit mail fraud, according to a statement released Oct. 13 by the U.S. Department of Justice.

According to the Justice Department, Townsley was released after his arrest on $150,000 bond after appearing before Judge Paul Abrams on Oct. 12 in federal court in Los Angeles.

Townsley was scheduled to make his next court appearance in federal court before Judge Joseph Spero on Oct. 15 in San Francisco.

The case has been assigned to U.S. District Judge Charles Breyer in San Francisco.

According to the Justice Department statement, Townsley had been indicted on the charges in June and the indictment was unsealed following his arrest.

Townsley was the president of California Liquid Fertilizer, which was based in Gonzales, Calif.

The indictment claims that from April 2000 to December 2006, Townsley "engaged in a scheme to defraud" in the company's sale of Biolizer XN fertilizer.

The indictment claims that the ingredients of the fertilizer were changed in the spring of 2000 after the Eugene, Ore.-based Organic Materials Review Institute had approved the fertilizer in 1999 to be listed as an organic fertilizer, based on an application that said it was comprised of fish, fish byproducts, feathermeal and water.

The indictment alleged that the fish and feathermeal were replaced with synthetic ingredients like ammonium chloride and ammonium sulfate, but that the company and Townsley continued to sell the fertilizer as an organic product until December 2006.

The indictment said that the company sold about $6 million worth of the fertilizer before it stopped selling the product in 2006, after the California Department of Food and Agriculture had started an investigation.

The maximum sentence for each count of mail fraud and the conspiracy to commit mail fraud charge is 20 year in prison per count, a $250,000 fine and restitution.


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