WASHINGTON — The New Holland Sales Stable in New Holland, Pa., was among several livestock auction houses and dealers that have been assessed more than $200,000 in civil penalties, the USDA’s Grain Inspection, Packers and Stockyards Administration announced Tuesday.
GIPSA said its 18-month investigation into schemes to falsify the selling price of livestock at livestock auction markets across the country in violation of the Packers and Stockyards Act is continuing.
Through Dec. 12, it had found evidence in 12 separate cases of fraud including seven livestock auctions and five dealers, the agency announced.
“Federal regulations require that livestock auction markets, and individuals who buy on commission for someone else, keep and provide true written accounts of the transaction to the sellers and buyers,” said GIPSA Administrator Larry Mitchell.
GIPSA said it assessed a $75,000 civil penalty against New Holland Sales Stables Inc. after filing a complaint on Aug. 24 alleging that the auction house had manipulated the price of livestock it purchased for its customers by producing false market invoices showing inflated prices.
The administration filed the complaint, according to Catherine Grasso, spokesperson for GIPSA, after a routine audit of the sale stables’ records.
The complaint states that between Jan. 7 and April 1, 2010, the sale barn, which has a dealer’s license and can buy and sell cattle under the New Holland name, created 109 false auction market invoices to 21 different buyers.
It states that New Holland falsely recorded sale ring purchases it had made under the name of Frank Fillippo, a cattle dealer listed as being from Norristown, Pa., and later stated on the invoices that Fillippo resold cattle for a higher price.
Fillippo never bought or resold cattle, but the price listed on the invoices was the price forwarded to buyers.
In all, the deals involved 777 cattle and, according to GIPSA, netted New Holland $15,345 in additional money.
Fillippo, according to the complaint, was paid $50 a week from New Holland for the use of his invoices to mark up the prices.
David Kolb, president of New Holland Sales Stables, and Frank Fillippo settled with USDA during a hearing in front of an administrative law judge in Washington on Nov. 27, in which they signed a consent order acknowledging the investigation, but did not admit or deny their involvement in the case.
Grasso said New Holland has since paid the fine. But the sales stable was also placed on a two-year probation and faces a six-month suspension of operations if it violates the terms of the settlement.
Multiple calls to Kolb at the sales stable Wednesday were not returned. Lancaster Farming contacted Steve Fillippo, son of Frank Fillippo, who said his father did not want to comment on the case.
In other enforcement actions announced Tuesday, United Producers Inc. (UPI), agreed on Nov. 8 in a consent decision to pay a civil penalty of $110,000 to resolve a complaint GIPSA filed against it on Sept. 14 alleging that it created false invoices for livestock sold to two dealers.
Those dealers, Thomas Witt and Louis “Corky” Holle, requested that UPI create invoices with inflated prices, and in turn presented those false invoices to customers who purchased the livestock.
According to the complaint and an attached letter from UPI’s corporate controller and assistant treasurer, personnel at its Marysville, Mo., facility complied with the dealers’ requests to create the false invoices.
In yet other actions, GIPSA filed a complaint on April 27 against the Milan Livestock Auction Inc., Brookfield, Mo., for creating false invoices, and has separately settled with four other livestock auctions through stipulation agreements and payment of fines.
Those other auctions are Lolli Brothers Livestock Market, Macon, Mo.; Kingsville Livestock Auction, Kingsville, Mo.; Appanoose County Livestock Inc., Centerville, Iowa; and the Russell Livestock Market, Russell, Iowa.
Additionally, three dealers found to be involved in false invoice schemes have been fined.
Ronald Wayne Kitchen of Huntsville, Mo., was ordered to pay a $7,975 civil penalty and restitution to Laura’s Lean Beef in the amount of $2,025; and Chad Duncan, Brunswick, Mo., was ordered to pay a $7,250 civil penalty and $3,265 in restitution. Chris Arnaman of Cameron, Mo., paid $2,425 pursuant to a stipulation agreement.
Complaints have also been filed against T&M Cattle Inc. and Travis Witt, Falls City, Neb., and Monty Witt, also of Falls City, Neb.
GIPSA said additional complaints will follow in the weeks ahead.