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Taxpayers Fund Free Cattle-Feed Program But Recipients Fraudulently Exporting Feed for Profit, Says DoJ

June 18, 2010

A new False Claims Act Complaint in the Western District of Missouri spins a bizarre tale that reads more like a Kurt Vonnegut novel than a court pleading: Hidden in a secret warehouse — dubbed the “DOD Facility” because it was once a Department of Defense building — millions of  pounds of government non-fat dry milk were shrink-wrapped in sea cargo containers and trucked to Union Pacific railroad cars then to various seaports for eventual illegal exportation to the Netherlands, Estonia, Germany and the Philippines.

The milk was originally purchased by the government with taxpayer dollars through the USDA’s Commodity Credit Corporation, which essentially purchases food products and warehouses them to control the world food supply in order to regulate domestic food markets. In other words, the government buys milk, dehydrates it, and sticks it in warehouses to keep the price of food high for big farming interests in the United States. Then, in an effort to subsidize big farming interests, the milk is repurposed into pellets and handed out for free (or for a $1 per truck shipping fee) to farming corporations as livestock feed  to produce even more food (read about feeding dry milk to cattle). As strange as that sounds, that is the way it is supposed to happen.

But according to the Complaint, Richard Carter, Jerry Goodwin, R&J Feed Co., and Carter Livestock, Inc. secretly sold and exported nearly 15,000,000 pounds of the free dry milk to foreign countries. Not only does this indicate a possible gross abuse of taxpayer trust, it could also result in a flood of milk on the international market which could then prompt the government to buy even more food to be stuck in warehouses somewhere in order to maintain the high price of food — while every five seconds somewhere in the world a child starves to death. The Complaint really must be read in its entirety to appreciate the multi-level fraud, waste, and abuse chronicled therein:


To report false claims or other government fraud and abuse, contact Frohsin & Barger.

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