Tuesday, June 5, 2012

Owner of Grain Exchange Sentenced for Fraud

The United States attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today that John Kniepmann, 48, of Breese Illinois, d/b/a the Grain Exchange and Consolidated Exchange, was sentenced in federal district court to a total of 15 months in prison, followed by three years’ supervised release, on two counts of mail fraud. He was further ordered to pay restitution totaling $108,482.40.

Facts revealed in the case showed that Kniepmann owned Consolidated Exchange Inc. and The Grain Exchange LLC. These entities, Consolidated Exchange Inc. and The Grain Exchange LLC, purchased grain from farmers and then sold the grain on the open market. In the course of Consolidated Exchange Inc. and The Grain Exchange LLC’s regular business practices, the companies stored grain, transported grain using rented trucks, and maintained sales records in their offices. Count one pertained to a fraudulently inflated insurance claim for a Consolidated Exchange Inc. storage shed located in Carlyle, Illinois that was damaged in a fire. Kniepmann used the extra proceeds from the insurance claim for construction costs of a personal residence in Breese, Illinois. Count two pertained to the nominee sale of grain that was collateralized. In 2006, and continuing, while John Kniepmann was doing business as Consolidated Exchange Inc. and The Grain Exchange LLC, he knowingly executed a scheme to defraud First State Bank through a nominee sale of grain. The proceeds from the nominee sale were concealed from the bank and were used to pay personal debts owed by John Kniepmann for vacations and housing costs.

The investigation was handled by the Federal Bureau of Investigation and the Illinois Department of Agriculture, with assistance from the National Insurance Crime Bureau. The prosecution was being handled by Assistant United States Attorney Ranley Killian.

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