Working 4 You: Turner Grain Victims Demand Justice After a Year with No Results

LITTLE ROCK, Ark. – It’s been more than a year since Turner Grain Merchandising went bust, leaving farmers, truckers and other brokers owed more than $35 million, according to bankruptcy filings. But victims of the fiasco say they’re left wondering who is looking out for them as the months continue to go by with little to show for it. They feel those involved with Turner Grain should be facing charges.

Two harvests, reaping no answers

Farmers and other who rely on the fields for their livings measure the months in terms of seeding and sowing.

"We're at 13 months and nothing, no one will tell us nothing," said Jim Mead of Delta Grain Marketing in Jonesboro.

He and farmers across the state have seen two harvests come and go after finding themselves the victims of a company default, estimated to cost the state’s largest economic driver around $50 million.

“We need people to find this money,” Mead said. “This is the largest Ponzi scheme that ever has happened in Arkansas."

Mead has spent the past year combing through paperwork filed in court.

"It just seems like everyone had their hush papers gave to them, and that's where we are today," Mead said. “I think it’s time to burn those hush papers and start indicting people.”

Mead and others like him lost big. Mead’s company has claimed more than $1 million in losses from Jason Coleman’s and Dale Bartlett’s company going under.

"Turner Grain didn't care what the market was. They would offer you the price whatever it would take to get you to sell to them, Mead said. “And they would turn around and sell it to generate money to keep the Ponzi scheme going."

A scheme that snowballed

Mead believes the bulk of the Ponzi scheme happened, and fell apart, in the spring and summer of 2014. Walking us through the paperwork filed in multiple cases over the past months.

Comparing delivery tickets to contracts, Mead points to prices Turner Grain offered to producers, claiming crops would be sold at a particular price. But looking at filings from companies like Bruce Oakley revealed to Mead that Turner Grain was selling it at much lower prices.

“They just needed the grain to keep coming in to sell it whenever they could to keep paying the back,” Mead said. “And everyone out there knows what everyone is selling for. It’s hard for me to believe some of these companies didn’t know Turner Grain was promising higher prices, and the farmers weren’t going to end up getting paid.

A lawsuit for fraud and breach of contract in Lonoke County, which was just recently remanded back to that jurisdiction from bankruptcy court alleges as much. Nearly two dozen plaintiffs are involved, alleging Turner Grain acted specifically as an agent of KBX, a grain-buying company in Benton, Ark.

The lawsuit alleges that all parties involved knew Turner Grain would eventually be unable to pay the farmers what was owed but Turner Grain and KBX continued to take loads and deliveries. KBX has denied the allegations in court.

The long wait for justice

Initially, Mead thought justice would be swift after he reported the issue to the FBI and Attorney General.

"I felt good for a while, but then the calls quit coming in and it got bad," he said. “The agents were initially interested, but then it’s like someone put the brakes on it. And nothing has happened.”

His follow-up calls, Mead said, to the Attorney General’s Office once Leslie Rutledge was elected revealed to him that no one in the office was aware of Turner Grain.

Multiple farmers told us they had spoken face-to-face with Rutledge or a member of her staff, yet the office claimed it had no formal complaints on file relating to Turner Grain. Since then, nearly a dozen farmers say they’ve submitted formal consumer complaints but have yet to hear back from the AG.

 The Attorney General’s office declined to give KARK an on-camera interview about the issue. A written statement was provided which stated:

“The impact of the Turner Grain demise on farmers and the entire Delta region is of great concern to me. I commend the General Assembly for adopting legislation to help prevent a situation like this from occurring in the future. The Arkansas Grain Dealers Act of 2015 will provide the Arkansas State Plant Board more authority and oversight of State grain dealers, which will help fill a regulatory void with common sense rules to protect farmers. Although this issue started prior to my administration, Arkansans were harmed and Turner Grain and its leadership need to be held accountable. I continue to monitor the current bankruptcy proceedings, and I am evaluating any role my office may be able to take.”

Bankruptcy or bust

Turner Grain's business basically fell apart in August of 2014. That's been over a year ago. And most of the movement on this case has happened at federal bankruptcy court.

Earlier this month, a slew of lawyers arrived at federal court to offer updates on the progress of the bankruptcies and a half dozen lawsuits that have been hung up in court.

"A lot of people feel like it's taking a long time for anything to get done, do you have any response to that?” this reporter asked following the court proceedings.

Attorney Kevin Keech spent the most time addressing the judge in court, but he didn’t have much to say to KARK following the hearing.

"I'm not actually in a position to comment today. I appreciate you coming over and taking a look. We made quite a bit of comments from the podium, and I think we'll stand on those at the moment," he said.

“Everyone is spread out across the state, and a lot of these people are wondering how this is progressing. Is it progressing at this point?” we followed up.

Every question we asked received the same response.   

“I'm going to stand on the same thing we talked about,” Keech said. “But thank you very much for your time today -- take care."

According to Keech inside the courtroom, where cameras aren’t allowed, only $1.5 million in assets from Turner Grain have been identified, while at least $36 million is estimated owed to more than 110 creditors.

That amount even as companies say they made major payments to Turner Grain in the weeks before the bust. KBX, for instance, filed documents in Lonoke County Circuit court claiming it paid more than $28 million to Turner Grain between June and August 2014.

While Turner Grain has filed documentation showing other grain companies still owe for grain received, Mead wonders where all that money evaporated to.

“Jason Coleman could have $10 million in a bank account and there’s nothing we can do about it,” Mead said. “No one is doing anything.”

All the while, farmers have said checks from Turner Grain they received during that time bounced at banks across Arkansas.

“We received a check that wasn’t any good,” Mead said. “And I called my lawyer and told him that I thought we had just been robbed of a lot of money. A lot of farmers were having those bounce.”

According to court documents, while victims wait for funds lawyers are getting paid. Around $250,000 in attorney fees and expenses have been ordered paid in the associated bankruptcy cases, and that’s not accounting for lawyers hired by farmers in civil suits.

"Let's stop the bleeding. We don't need people getting 2 percent of millions of dollars," Mead said.

Keech did testify in court on October 6 that the forensic accounting team that had only been hired and begun working to go through Turner’s finances two months ago would hopefully make progress in identifying where the money had gone.

When we asked if it was typical for it to take so long to hire a forensic accounting team in a case like this, Keech declined to comment after the hearing.

Federal investigation? Inappropriate to comment.

Police told us Turner Grain’s business files were turned over to the FBI back in September 2014. But when we inquired about the status of the investigation, we received a one sentence response from a spokesperson, “It would be inappropriate for me to comment at this time.”

An attorney for Jason Coleman, who does not specifically represent him solely for the bankruptcy, said in court documents that he would plead the fifth, to avoid self-incrimination, if he were asked to testify or be deposed in the bankruptcy case. The attorney cited an ongoing federal investigation.

However, Coleman has not filed personal bankruptcy. While his business partner Dale Bartlett has, neither of them are facing criminal charges at this point.

When we asked the U.S. Attorney’s Office if it was spearheading any sort of investigation or expecting to indict, a spokesperson declined to comment there, as well.

Which, Mead said, is baffling to him. He points to a Missouri case of a similar nature, where a grain dealer was using profits from the sale of a group of farmers’ grain to pay back the “base” of the Ponzi scheme she was running. Within roughly the same time period Turner Grain has been involved in bankruptcy, she was indicted and pleading to charges.

“How is that possible? The only difference in these cases is she only got away with $27 million. This mess is going to be double that,” Mead said.

Another group of grain brokers were indicted in Texas last week, leaving those in Arkansas, Missouri and Mississippi who were hit by Turner Grain wondering what’s taking so long in their case.

“We need help”

Mead said he simply wants to see help come to those who he feels have been robbed and put in a position of losing their livelihoods.

"The victims are very forgotten," Mead said. “We just need help, badly.”

When the dust finally settles, he has doubts any of these victims will have anything to show for it, except for years of hard work blowing in the wind. But he’s hoping anyone who can help will take him up on an offer he says he’s good for.

“I can take them through the paperwork. I’ll tell them where to look. It’s really elementary when you get down to it. Give me something to do besides waiting and losing sleep. It’s getting old for all of us.”

To follow this story and all of Marci Manley's coverage, click here for Facebook or here for Twitter.

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KARK Working 4 You is committed to highlighting issues that are important to Arkansas. If you have a story that needs to be covered, call Reporter Marci Manley on the Working 4 You Tipline at (501) 340-4448 or email at working4you@kark.com.


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