Federal prosecutors have charged an Oregon grass seed company with misprision of a felony for allegedly concealing bogus commissions and price mark-ups.
The U.S. Attorney’s Office alleges that Proseeds Marketing of Jefferson, Ore., helped the head of another grass seed dealer commit fraud that recently landed him behind bars.
Misprision of a felony occurs when someone knows a felony has been committed but does not inform the authorities about it.
Proseeds would buy grass seed from the Jacklin Seed facility in Albany, Ore., and then immediately sell it back to the company at a higher price, according to court documents filed by the federal government.
Most of the profit was then sent to Chris Claypool, Jacklin’s general manager who lived in Spokane, the government said. Earlier this year, Claypool pleaded guilty to fraud charges for these and other schemes, for which he was sentenced to three years in prison.
The mark-up scheme was committed a dozen times between late 2018 and mid-2019, generating nearly $475,000 in ill-gotten gains, the prosecutors allege.
As a salaried employee, Claypool wasn’t eligible to receive commissions from Jacklin, so he relied on Proseeds’ help to get around this limitation, the government said in court documents.
Proseeds acted as an “unnecessary middleman” for Claypool, serving as an intermediary for sales of Jacklin’s grass seed to foreign buyers at marked-up prices, the government alleged.
The company then paid “fraudulent commissions” to Claypool through “straw corporate entities” he’d set up to look like independent seed brokers and consultants, the government said.
If convicted, Proseeds Marketing could be sentenced to five years probation and a $500,000 fine. The company refused to comment on the allegations.