Breaking News Blog

Monday, Aug 06 2012 04:15 PM

Guilty plea in mail fraud scheme connected to organic fertilizer businesses

By BREAKING NEWS BLOG

Kenneth Noel Nelson Jr., 59, of Bakersfield, pleaded guilty Monday to four counts of mail fraud in connection with a scheme to defraud organic farmers and other customers of his organic fertilizer businesses.

In his guilty plea, Nelson admitted that from 2003 to January 2009 he defrauded customers such as organic farmers and distributors through his company, Port Organic Products Ltd., and affiliated businesses by manufacturing and selling fertilizers that he falsely represented were organic products permitted for use in organic agriculture. Organic farmers and distributors relied on Nelson's representations as to the fertilizers' organic status in purchasing the products for use in organic agriculture.

Nelson admitted that he actually caused large amounts of synthetic materials not permitted in organic fertilizers or organic agriculture, such as aqueous ammonia, ammonium sulfate, and urea, to be used in the fertilizers.

Nelson admitted that the total losses attributable to the scheme were between $20 million and $50 million. From 2003 through 2008, Nelson received profits of more than $9 million from the scheme.

Nelson also agreed in his guilty plea to forfeit the following assets: a 2006 Chevrolet Silverado, a 2005 Mini Cooper, a 2004 Porsche Cayenne and a personal money judgment of $9 million.

Nelson is scheduled to be sentenced Nov. 5. The maximum statutory penalties are 20 years in prison and a $250,000 fine on each mail fraud count, and up to three years of supervised release.

- Office of U.S. Attorney Benjamin B. Wagner, Eastern District of California

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