Missouri woman indicted in multi-million dollar Ponzi scheme

KSDK -- The owner of T.J. Gieseker Farms and Trucking has been indicted on federal charges involving a multi-million dollar Ponzi scheme, according to Acting U.S. Attorney Michael Reap.

Cathy M. Gieserk, of Martinsburg, Missouri is charged with one felony count of mail fraud, one felony count of wire fraud and one felony count of interstate transportation of stolen property. She is also charged with a forfeiture count, which would require her to give up all cash and property derived from illegal activity if she is convicted.

According to the indictment, Gieseker ran a grain trucking and marketing company from her residence at 35424 Audrain Road 708 in Martinsburg. She was paid approximately .20 to .25 cents per bushel for transporting grain, and approximately .03 cents per bushel for marketing grain to grain terminals.

The indictment alleges that between October 2002 and February 2009, in addition to transporting grain, Gieseker began to market grain on behalf of farmers. In this capacity she quoted above-market prices to farmers and represented that she had contracts from Archer Daniels Midland Company (ADM) to guarantee the prices. During the course of this scheme, Gieseker delivered and sold virtually all of the grain at ADM. However, the indictment states that Gieseker did not hold contracts that guaranteed the above-market prices she had quoted farmers from ADM. Instead, she sold all of her grain at the "spot price" (local cash price for immediate settlement and delivery) and used the proceeds from subsequent grain transactions to pay the above-market prices she had previously promised other farmers. In this manner, Gieseker defrauded approximately 180 farmers out of approximately $27,000,000 - $50,000,000 in proceeds from grain sales she made on their behalf, with most of the proceeds going to pay other farmers who had previously been quoted above-market prices.

Beginning in 1993, Gieseker and her late husband, Timothy Gieseker, operated strictly as a trucking company and were paid for shipping farmers' grain to grain terminals under "T.J. Gieseker Farms and Trucking" and "T.J. Gieseker Trucking, LLC." In 1993, as part of this trucking business, Gieseker obtained a Missouri Class IV Grain Dealer's License from the Missouri Department of Agriculture.

Missouri Class IV grain dealers are licensed as dealers primarily engaged in the trucking or transportation business, who as part of their business can buy and sell grain. Besides being required to maintain a minimum net worth, Class IV Dealers are required to make payment to the seller within thirty (30) days of delivery, or upon demand of the seller. These dealers can not issue minimum price contracts or any type of credit sales contract, including delayed price and deferred payment contracts. In addition, Class IV Dealers are not authorized to offer storage of grain for any of their customers.

Each of the mail and wire fraud charges carries a maximum penalty of 20 years in prison and/or fines up to $250,000. She faces a maximum of 10 years in prison and/or fines up to $250,000 for the interstate transportation of stolen property charges.