Former seed manager sentenced for wire fraud, money laundering

By |  July 21, 2021 0 Comments

Christopher Claypool, a former general manager of the Jacklin Seed Co., a producer and marketer of grass seed and turfgrass in the Pacific Northwest, was sentenced to prison in early July for conspiring to commit wire fraud and money laundering to defraud J.R. Simplot Co., Jacklin’s former owner, and its customers.

Claypool was sentenced to three years in federal prison and three years’ supervised release. Claypool has paid $8.3 million in restitution and will forfeit $7.8 million in criminally derived proceeds.

According to the U.S. District Attorney’s Office of Oregon, Claypool oversaw Jacklin’s domestic and foreign sales to distributors. He contracted with independent growers in Oregon to produce proprietary grass seed varieties, which had variable seed yield rates and resulted in the overdelivery of some varieties and underproduction of others.

Court documents said somewhere between 2013 and 2015 Claypool and other Jacklin employees realized growers’ preference for high-yield grasses created shortages of lower-yield varieties Jacklin was contracted to deliver to customers. This would either require the company to pay a premium to growers to up the needed inventory or cause the company to fail to deliver on existing contracts.

Claypool and colleagues from 2015 to the summer of 2019 instructed employees to fulfill orders with different varieties of grass seed than were ordered, to conceal the substitutions with misleading and false labels and to invoice customers under the original terms of the contracts.

In an additional scheme, Claypool directed an accomplice to create an LLC to pose as an independent seed broker. He and a colleague routed a portion of Jacklin’s overseas sales through a competing grassed seller based in Jefferson, Oregon. The company then marked up the sales and kicked back outside commissions to Claypool through the LLC. Court documents say Claypool generated more than $369,000 in fraudulent commissions from December 2018 to December 2019.

Claypool, in a third scheme, also conspired with the owner of an independent travel agency in lieu of Simplot’s contract travel agency in Spokane to inflate the costs of Claypool’s international business travel. Through the independent agency, Claypool booked economy and low-cost fares but created fake first-class bookings on the most expensive itineraries to generate inflated invoices submitted to Simplot through Claypool for payment. Claypool had the authority to approve his own travel expenses and overbilled more than $500,000 in international airfare, the majority of which he received kickbacks from the agent for.

In his most profitable money laundering scheme, Claypool directed Simplot’s payment of more than $12 million dollars in rebates and commissions to entities posing as foreign sales partners but were coconspirators in embezzling the funds. The coconspirators transmitted the funds into accounts in Hong Kong real estate and Hawaii under Claypool’s control. Claypool then sold the real estate years later and wired the proceeds to investment accounts to Spokane.

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