Seed salesman charged with fraud
A seed salesman accused of stealing empty bags from his employer, filling them with bin run seed and selling them to farmers has been charged.
Jordan Rathke, 44, of West Bend made his initial court appearance on July 18 in Manitowoc County Circuit Court where he was charged with misdemeanor theft, use of a genuine mark without authority and knowingly violating seed labeling rules. During the hearing, Rathke entered not guilty pleas to all three misdemeanor counts.
Rathke is currently free on a $1,000 signature bond.
According to the criminal complaint, the Manitowoc County Sheriff's Office was notified by Lemke Seed Farms Inc. in January 2016 that an employee was allegedly using Lemke Seed bags to sell inferior seeds under the guise of their brand.
Manitowoc County dairy farmer Steve Sukowaty told investigators in the case that he had purchased 22 bags of soybean seeds from Rathke in 2015 valued at $1,276 and that the seed was under-performing.
'I had planted 23 acres of soybeans in 2015 and my agronomist told me there was something wrong with the crop and that I should add nitrogen fertilizer,' Sukowaty said. 'Typically beans don't need fertilizer, but come to find out I was sold bin run seeds that didn't have any innoculant on them.'
Sukowaty estimates that he spent $900 adding the fertilizer and lost $2,300 worth of yield in the fall of 2015.
'My dad had always purchased seed from Lemke Seed Farms and we always got quality seed. So I was surprised to get the letter from the company in reference to customers receiving inferior seed,' Sukowaty said.
The letter also informed customers that Lemke Seed Farms had no record of them receiving soybean seeds from their business. Owners of the company told investigators that they did not sell any Lemke Seed Farm products in 2015 as the company had merged with Legend Seeds and any seeds sold that year would have came in Legend Seed bags, according to the complaint.
When investigators visited Sukowaty's farm, they examined four bags of leftover seed packaged in Lemke bags. The bags, however, had no identifying stamps to indicate where the seed had been sold from, nor was there ID tags sewn into the closure, according to the complaint.
Lemke Seed owner Rick Lemke examined a bag of seed corn sold by Rathke to Sukowaty and confirmed that the bags were missing any stamps — required by law — showing the product was sold by their company. In addition, Lemke pointed out that a Legend ID tag sewn onto the Lemke Seed Farms bag was at least 2-3 years old and had an extra set of holes, indicating that the tag had been reused, according to the complaint.
Lemke told investigators that his company owns a hand-sewing machine used to repair ripped bags in the warehouse. He added that the machine was found to be missing last year and that it was eventually discovered that Rathke had borrowed it without their knowledge, according to the complaint.
When questioned by investigators, Rathke said seed bags were 'always floating around' and acknowledged that while he used Lemke Seed Farms bags, they were not filled with seeds belonging to Lemke Seed Farms. Instead, Rathke said he had sold Sukowaty seed that was no longer in the Lemke Seed Farms line-up.
Rathke noted that the unlabeled bags contained Roundup Ready 1 soybeans. He acknowledged that Monsanto Co. had the rights to Roundup Ready 1 soybeans but that the seeds were now off patent. He told investigators that some farmers still had the off-patent Roundup Ready 1 variety and that he had purchased those seeds (that he had sold to Sukowaty) from one of those farmers. Rathke, however, declined to identify which farmer had sold him the seeds, according to the complaint.
Rathke told investigators that he has a huge inventory of seeds in his personal warehouse that he sells to customers. He stated that he purchases leftover products from other dealers that he carries back and resells the following year, according to the complaint.
During the investigation, Rathke admitted that he had been contacted by a Department of Agriculture official who had received complaints about the labeling on his bags. Despite Rathke's claims that he was selling Roundup Ready 1 beans, because he was packaging the beans in the Lemke Seed Farms bags, the official told Rathke that he was 'using their brand'. Rathke reasoned that since Lemke Seed Farms no longer exists following their merger with Legend Seeds, there was no Lemke Seed Farms, according to the complaint.
A DNA test conducted by Monsanto Co. concluded that Rathke was selling the Roundup Ready 1 variety of seed and not the patented Roundup Ready 2 variety, according to the complaint.
The complaint states that during questioning, Rathke told investigators that he didn't 'know all the rules exactly as far as bagging and tagging' seeds. According to the Lemke Seed Farms website, Rathke's father was a long time salesman for the company and Rathke had 'grown up' in the business.
Sukowaty noted that investigators are speaking with farmers in eight Wisconsin counties that may have purchased seed from Rathke under fraudulent circumstances.
'An investigator told me that he has never seen this happen before. Oftentimes neighbors sell seeds to a neighbor, but he's never seen anyone putting seed in a different bag and selling it as good seed,' Sukowaty said. 'He's still out there selling seeds for another company and people need to know about this.'
Rathke isn't the only seed salesman under the microscope. Former salesman Douglas Pfaff is accused of selling seed corn to farmers in Dane County this spring. Unfortunately for farmers, the corn never materialized at planting time.
The 59-year-old Mount Horeb man is charged wtih 19 felonies in Dane County Circuit Court. Charges include one count of theft by false representation and 18 counts of unauthorized use of an entity's identity.
According to the criminal complaint, Pfaff claimed to be a salesman for Renk Seeds at the time he made nearly $20,000 in bogus sales to more than a dozen Dane County farmers between October 2015 and April 2016.
Rathke is due back in court on Sept. 22 for a plea hearing.