Ohio Indemnity Fund helps return $2.5 million to farmers.

July 17, 2018

2 Min Read
Grain handler steals more than $3m from Ohio farmers

Richard Schwan, 79, of Monroeville, Ohio, pleaded guilty to multiple charges related to the theft of more than $3 million in grain from 35 Ohio farmers.

He pleaded guilty to two felony counts of aggravated theft and one felony count each of attempted theft, falsification in a theft offense, insolvent handler and delayed price agreement.

Schwan operated Schwan Grain Inc., which transported and sold grain on behalf of the 35 farmers from Erie, Huron, Lorain, Richland and Seneca counties in Ohio. He was arrested in November after an investigation by the Ohio Department of Agriculture found that between 2012 and 2014, he sold more than $3 million in grain for the farmers but deliberately failed to pay the victims their shares of the profits.

"Ohio's farmers work hard to produce their crops, and this defendant callously took the profits of their labor," Ohio attorney general Mike DeWine said. "Our priority in this case has always been to recover the money that rightfully belonged to these farmers, and a condition of this plea agreement requires the defendant to promptly repay the money he stole."

As part of the plea agreement, Schwan must pay $3,222,209.90 in restitution prior to his sentencing hearing on Aug. 23. The money will be used to reimburse the farmers, the Ohio Department of Agriculture and the Ohio Grain Indemnity Fund.

The farmers had received approximately $2.5 million in reimbursement from the fund, which protects farmers from grain handlers who become insolvent. The fund is paid for by Ohio farmers through a fee of 0.5 cent/bu. Through the fund, a farmer is reimbursed 100% for open storage grain in the elevator and 100% of the first $10,000 of a loss for future contracts, delayed price and basis transactions, with 80% reimbursement beyond the first $10,000 of loss.

The remaining restitution will reimburse the balance of the funds still owed to the farmers and will pay for investigative costs incurred by the Ohio Department of Agriculture.

“All of Ohio’s grain farmers pay into the Grain Indemnity Fund, and we’re pleased it will be reimbursed for their ultimate benefit,” Ohio Department of Agriculture director David Daniels said. “We appreciate the work of all parties to resolve this matter, making sure Ohio farmers are protected for years to come.”

Farm equipment worth hundreds of thousands of dollars was also seized as part of the investigation.

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