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Ex-Sioux City ag co-op officer gets prison for fraud scheme

SIOUX CITY (AP) — A second former officer at a northwest Iowa agriculture cooperative has been sentenced to federal prison for a grain-blending fraud scheme.

Kenneth Ehrp was sentenced Wednesday to three months in prison after pleading guilty in November to one count of conspiracy to defraud the government, the Sioux City Journal reported.

Prosecutors accused Ehrp and another officer, Calvin Diehl, of ordering Farmers Cooperative Society workers to layer soybeans over lower-value oats in bins and trucks while claiming the entire load was soybeans. The officers then concealed the practice from customers and U.S. Department of Agriculture inspectors, officials said.

The scheme to overvalue the co-op’s grain inventory was conducted to influence a lender’s action on a loan, prosecutors said.

Diehl was also sentenced to three months in February on the same charge.

The U.S. Grain Standards Act prohibits blending different grains unless the blend is designated as “mixed grain” or an exemption is granted by federal regulators.