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John Reitman

By John Reitman

Charges of fraud bring new meaning to the seedy side of turf

In the waning hours of the 2018 Golf Industry Show in San Antonio, Chris Claypool of Jacklin Seed couldn't wait to talk to TurfNet about shortages in the seed industry. Little did we know at the time that it appeared he might be trying to solve those shortages all by himself.

Claypool, the former general manager of Jacklin Seed Co., is facing charges of conspiracy to commit wire fraud and money laundering against the company's former owner, J.R. Simplot Co., according to the U.S. Justice Department. If convicted, Claypool faces up to 70 years in prison and fines of more than $15 million.

030321seedy2.jpgThe U.S. Attorney's Office in Oregon says Jacklin Seed contracted with independent growers for the production of proprietary grass seed varieties and fulfilled orders from a distribution facility in Albany, Oregon. But much of what Jacklin delivered, under Claypool's direction, was not what customers ordered, according to federal documents.

Claypool, 52, (at right) oversaw the company's product sales to domestic and international distributors.

U.S. attorney officials said Claypool's alleged schemes include packaging seed varieties with false and misleading labels, embezzling more than $12 million while posing as a foreign sales partner and conspiring with a travel agency in Spokane, Washington, to inflate costs of his international travel.

Throughout the duration of Claypool's elaborate matrix of deception, Jacklin Seed was a division of JR Simplot Co. Jacklin was acquired by Barenbrug in October 2020.

The U.S. Attorney's Office says Claypool and other Jacklin employees, upon recognizing shortages of some lower yield turfgrass varieties, began a process of substituting different varieties of seeds and hiding the substitutions from customers with falsified labels and invoices, all to avoid paying premiums to growers that would adversely affect the company's profits and their own careers. This practice of deception began in early 2015 and continued at least until 2019, according to the justice department.

At the 2018 GIS, Claypool told TurfNet that because of all the turfgrass varieties on the market today, customers were not too choosy about what they bought - or at least what he shipped.

"There are so many choices now. It's almost confusing to the end user," Claypool told TurfNet from the tradeshow floor in San Antonio. "There are some elite Kentucky bluegrass varieties, but those elite varieties don't have prolific seed yield.
 
"People don't ask much for a specific variety. They just want seed."

Whether that is true, the U.S. Attorney says whatever is in the bag must match what is on the label. Throughout the duration of this dastardly seed plot, Jacklin invoiced customers for $1.1 million in seed it did not deliver, the U.S. Attorney's office wrote.

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The turf seed market once was dominated by a few varieties and price was about all that mattered. As turf management has evolved with lower heights of cut leading to more and more stress issues, the market has become overrun with an increasing number of varieties as turf breeders seek to develop grasses with improved resistance to various biotic and abiotic stress factors. Factors like price and high yield that once were attractive, have taken a back seat to increased resistance and other traits that might be more costly up front, but can help users save money in the long run.

As a result of low yield, more acres are taken out of turf production and transitioned into agricultural crops with higher profit.

Bilking customers for product they never received is only the tip of Claypool's intricate and elaborate scheme.

Claypool's elaborate plot of deception grew faster and more vigorously than the grass he was awaiting to produce seed. According to the justice department, under Claypool's urging, an accomplice created a limited liability corporation to act as an independent seed broker. Claypool is charged with funnelling Jacklin sales through the newly created LLC, charging mark ups and taking kickbacks. Over the course of eight months from December 2018-August 2019, Claypool generated more than $369,000 in fraudulent commissions.

If convicted, Claypool faces up to 70 years in prison and fines of more than $15 million.

As the GM of a seed company that did a great deal of international business, Claypool traveled extensively overseas. According to the justice department, he generated another $500,000 in kickbacks from a travel agent who inflated the costs of Jacklin-paid international travel.

The coup de grace of Claypool's elaborate plan of deception and fraud was, according to the U.S. Attorney's office, when he funneled $12 million in rebates and commissions to entities established to appear as foreign sales partners but in reality were front organizations for Claypool and his co-consipirators. Those funds were distributed to accounts in Hong Kong to real estate investments in Hawaii that Claypool himself controlled and eventually sold, sending the money ultimately, as part of a money-laundering scheme, to investment accounts in Washington.

This case is being investigated by IRS Criminal Investigation and the U.S. Department of Agriculture Office of Inspector General. It is being prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.

Edited by John Reitman

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