Rural farmers in central Missouri have their own version of a Midwest Bernie Madoff. Cathy Gieseker, a long-time Missouri grain dealer and owner of T.J. Gieseker Farms and Trucking, has been charged with running a pyramid scheme built on grain purchases that allegedly swindled hundreds of farmers out of as much as $50 million.
The July 20 indictment alleges that between October 2002 and February 2009 Gieseker began to market grain on behalf of farmers, promising them that she could sell their grain for higher-than-market prices because of supposed contracts secured from Archer Daniels Midland Company (ADM). During the course of the reported Ponzi scheme, Gieseker delivered and sold virtually all of the grain at ADM.
In reality, however, Gieseker did not have access to any of the contracts that guaranteed the above-market prices quoted to farmers from ADM. Instead, Gieseker sold the grain at the “spot price” (the local cash price for immediate settlement and delivery) and used the proceeds from subsequent grain transactions to pay the above-market prices previously promised to other farmers.
Farmers who agreed to have Gieseker sell their grain toward the end of the scheme didn’t get paid at all, according to the indictment.
Missouri Attorney General Chris Koster has charged Gieseker with 12 felony counts, including federal charges of mail and wire fraud and interstate transportation of stolen property. She also faces state charges of unlawful merchandising, filing false financial statements and stealing.