USDA’s AMS issues penalties for Packers and Stockyards Act

The U.S. Department of Agriculture has assessed several penalties against various entities and disclosed those in July. The information was released through its Agriculture Marketing Service and all cases were related to violations of the Packers and Stockyards Act.

It has reached a consent decision with JBS USA LLC, known as a Swift Beef Company, Greeley, Colorado. AMS conducted an investigation and that revealed JBS Swift failed to maintain and operate its dynamic monorail scales to ensure accurate weights at its Cactus, Texas, facility, on Aug. 9, 2016, and at its Greeley, Colorado, facility, on Dec. 1. 2016. The AMS said JBS Swift used inaccurate scales to weigh beef carcasses and recorded inaccurate or incorrect weights on accountings issued to sellers.

JBS was notified of such violations and immediately made adjustments as evidenced in subsequent passing of scale tests. JBS Swift paid a civil penalty of $29,000 and consented to a cease and desist order to maintain correct and accurate scales that records accurate and correct weights on scale tickets, internal records, kill sheets or other accounting issued to sellers of livestock.

A Springfield, Nebraska, man doing business as Leonard Cattle Company, agreed to serve a suspension of five years, which began June 15. The AMS found that Charles D. Leonard failed to make payments when they were due. Leonard also issued insufficient checks for $5.8 million in livestock purchases.

The AMS investigation revealed that Leonard operated while insolvent and Leonard’s insolvency, which is a violation of the act, ranged from $1.2 million on Aug. 31, 2015, to $3.3 million on Oct. 19, 2015.

A Plainville, Kansas, livestock sale barn entered into a consent agreement to pay a fine for failing to maintain its custodial account. The Plainville Livestock Commission and Tyler D. Gillum entered into the consent decree with the U.S. Attorney’s Office for District of Kansas.

A custodial account is a trust account that is a separate bank account designated for shippers’ proceeds. As part of its agreement the barn agreed to suspend market operations for two sale dates in late July and paid a civil penalty of $117,500 with $67,750 held in abeyance for six years. The remaining $50,000 will be paid in installments beginning Aug. 1. The sale barn has resumed regular operations.

A Windsor, Missouri, sale barn entered into a stipulation agreement and paid a penalty of $5,500. The Windsor Livestock Auction Co. Inc. revealed custodial account shortages of $670,040.06 in November and $1,059,176.51 in December.

A Monte Vista, Colorado, man entered into a stipulation agreement and paid a penalty of $750. The AMS found Robert “Bobby” Whiteman was operating as a livestock dealer without filing a proper registration and maintaining bond coverage from March 2017 through June 2017. The AMS requires livestock market agencies, dealers and packers post surety bonds to ensure ethical business practices and to comply with regulations and proper fund disbursements.

Dave Bergmeier can be reached at 620-227-1822 or [email protected].