Bernard Saul was sentenced Tuesday to three years in prison and ordered to forfeit $1.9 million in profits earned by falsely labeling conventional alfalfa seed as organic.
Saul, 58, pleaded guilty in March to federal charges of wire fraud and money laundering. He faced up to 20 years in prison on the fraud charge and 10 years for money laundering, but Senior U.S. District Judge Edward J. Lodge opted for a shorter sentence.
His wife, Roza Saul, pleaded guilty to delivery of a misbranded food product. She faces up to a year in prison when she is sentenced June 20.
Between 2010 and fall 2015, Bernard Saul, under the names Bliss Seed and Saul Farms, sold 7 million pounds of alfalfa seed labeled as organic. According to organic certification records Saul submitted to state agricultural officials, the farm was only capable of growing 35,000 to 50,000 pounds of organic seed annually. He bought conventional seed from four companies and sold it as higher-cost organic.
Marketing the seed as organic allowed Saul to charge an average of $3.75 per pound. Saul Farms bought nonorganic seed — which was treated with fungicides and pesticides — for an average of $2.50 a pound, according to an affidavit filed by FBI agent Drew McCandless, who investigated the case.
For agricultural products to be sold or labeled as “organic,” they must have been produced without the use of synthetic chemicals. In addition, the ground used to grow the products cannot have had any prohibited substances applied during the previous three years.
“Business people who misrepresent their product in order to make more money than their product is worth cheat both their customers and honest, fair businesses,” said U.S. Attorney for Idaho Wendy Olson. “This sentence sends the clear message that owners of businesses who cut corners in this way will be punished, and will not be able to keep the proceeds of their crime.”
Farmers and seed-handlers that bought from Saul Farms or Bliss Seed supply dairy and beef operations across the Midwest, the East Coast and the Southeast. The owners of businesses in other states that bought what they thought was organic alfalfa seed told the Statesman in February they were scrambling to find new suppliers.
The investigation began following a spot inspection at Summit Seed Coatings, a seed-coating business in Caldwell. The inspector found that Saul had delivered an estimated 300,000 pounds of organic seed to Summit for coating before shipment to Saul’s end customers. State records showed Saul could grow only 38,400 to 43,200 pounds of organic seed per year.
Inspectors took samples of the Saul Farms seeds on April 15 and Aug. 20 and sent them to a laboratory in Portland. They both tested positive for pesticides and fungicides.
Saul agreed as part of the restitution agreement to forfeit a $1 million property in Buhl that includes a residence and 438 acres of land. He also agreed to forfeit ownership in a 2012 Coachman Freelander recreational vehicle, a 2014 Polar Kraft boat, engine and trailer and a 2015 Dodge Ram pickup, all bought with proceeds of the fraudulent sales. On top of that, he agreed to turn over an uncashed $90,000 cashier’s check purchased last fall after he and his wife, Roza Saul, learned they were under investigation.
In February, the U.S. Attorney’s Office in Boise filed a forfeiture action against the Sauls, seeking those items. That action came before the criminal charges were brought.
The case was investigated by the Federal Bureau of Investigation, the United States Department of Agriculture, Office of Inspector General and the Internal Revenue Service.