Missouri grain dealer jailed in grain Ponzi

Monday, April 5, 2010

Missouri grain dealer Cathy Gieseker promised some farmers too much for their grain and paid them off by selling the grain of other farmers. She led a high life, spending millions of dollars on properties, gifts to friends and buying and showing cattle.

According to the St. Louis Business Journal Gieseker was sentenced to nine years in jail in February in connection with a $27 million Ponzi scheme, the largest grain brokerage failure in Missouri history. She pleaded guilty to one felony count of mail fraud and forfeited millions of dollars in personal property, but it won't be nearly enough to cover the losses of scores of farmers with no grain and no payment for their crop.

Gieseker had told farmers she had a special deal with a major grain company and offered prices twice the spot market at harvest. As futures prices rose in 2008, she was forced to pay an ever greater rate of return, according to Feedstuffs magazine.

The state is still pondering whether to file fraud charges. BF