Man bilks Moorhead plant of $642,181
Larry James Schrader ran a business called NC Marketing that sold liquid farm fertilizer to a couple of dealers in North Dakota and Minnesota.
Over a 10-year period, he grossed $642,181. Not a bad figure for a sideline venture with minimal costs.
The only problem was that Schrader had stolen the fertilizer from the former ConAgra Foods outlet in Moorhead, where he was a sales manager.
He instructed employees not to log quantities of fertilizer he had them drain from ConAgra's tanks on many occasions from 1996 until June 2005.
Schrader, a 70-year-old West Fargo man, pleaded guilty Thursday in U.S. District Court in Fargo to carrying out the scam.
"Is that what happened?" District Judge Ralph Erickson asked Schrader after prosecutor Brett Shasky laid out the allegations.
"Yes, sir," Schrader replied.
Under a plea agreement with federal prosecutors, Schrader pleaded guilty to one of six counts in an indictment issued in September.
He faces up to 10 years and a $250,000 fine for a charge of transportation of stolen goods. Five other counts were dismissed. If convicted of all six felony counts, he could have faced up to 60 years with fines of $1.5 million.
Federal authorities learned of the scheme after it was discovered by ConAgra security staff, who confronted Schrader about the missing fertilizer, Shasky said.
The investigation revealed that Schrader sold the stolen fertilizer to two dealers using bogus documents that did not disclose that the shipments originated from ConAgra, he added.
The unwitting buyers of stolen goods were Ada Feed & Seed of Ada, Minn., and Larson Grain Co., located in LaMoure, N.D., according to court records.
"The two businesses had to our knowledge no knowledge or part in this," Shasky said.
On some occasions, Schrader ordered employees to replace the stolen fertilizer with water in order to account for the loss in volume in the tanks.
"My understanding is most of the people got what they ordered," Shasky said in an interview when asked how many customers unknowingly bought watered-down fertilizer.
"To my knowledge I can confirm to you that did not happen very often," said Stephanie Childs, a spokeswoman for ConAgra at its corporate headquarters in Omaha. "It was a rare occurrence."
As soon as ConAgra learned of the thefts, it took swift action to prevent further losses or dilutions, and dismissed Schrader, she said.
Earlier this year, ConAgra sold the Moorhead fertilizer outlet, located at 2012 28th Ave. S., Childs said. It now operates as Gavilon, which is owned by a group of investors led by Ospraie Management that bought the former ConAgra Trade Group.
Schrader, who faces sentencing Feb. 10, declined comment after the hearing. "I have nothing to say," he said.
Readers can reach Forum reporter Patrick Springer at (701) 241-5522