Date: November 18, 2023 Contact: newsroom@ci.irs.gov Des Moines, IA — A Sigourney man was sentenced today to 33 months in prison for committing fraud by selling grain as organic, which in fact was grown in violation of the United States Department of Agriculture (USDA) National Organic Program (NOP). NOP is a federal regulatory program governing organic agricultural products. In April 2023, Mark Lynn Haines pleaded guilty to mail fraud and conspiracy to defraud the United States. According to public court documents, key among Haines' NOP violations were the use of treated seed, which is prohibited by NOP. Haines concealed his NOP violations from the Iowa Department of Agriculture and Land Stewardship (IDALS), the organic certifier. The grain was then sold by Haines to a number of unwitting purchasers at a total sale price of over $6.5 million. Haines also conspired to impede and obstruct the Internal Revenue Service (IRS) in the assessment and collection of income taxes. Between April 2017 and April 2019, Haines obtained false invoices, backdated checks, and exchanged checks to give the appearance of an expense that was not in fact incurred. In total, Haines concealed over $1.3 million in income. Restitution was ordered to the IRS in the amount of $408,107 and $25,233.44 to a purchaser of the purported organic crops. Following his prison term, Haines must serve a two-year term of supervised release. There is no parole in the federal system. "Mr. Haines took steps to falsify documents and obstruct the IRS' efforts to assess and collect his correct tax obligation," said IRS Criminal Investigation (CI) Special Agent in Charge Thomas F. Murdock. "This investigation shows our commitment to upholding the integrity of the nation's tax system and holding those who try to cheat the system accountable." "Consumers trust when they see the USDA Organic Seal, they are purchasing organically produced agricultural products. Haines' fraudulent activity compromised the integrity of the program and harmed USDA's ability to protect American agriculture. This investigation and prosecution should serve as warning to all farmers participating in the USDA National Organic Program that organic agriculture fraud will be vigorously investigated by the USDA-OIG, the U.S. Attorney's Office, and its stakeholders," said USDA OIG Special Agent-in-Charge Shantel R. Robinson. After the sentencing, FBI Omaha Special Agent in Charge Eugene Kowel said, "Mark Haines' deception and greed not only defrauded the American government, it compromised the trust and confidence of consumers who purchase organically grown products. Today's sentence should serve as a warning to others who ignore regulations and use deceptive practices to make a profit." United States Attorney Richard D. Westphal of the Southern District of Iowa made the announcement. The Internal Revenue Service Criminal Investigation (CI), the United States Department of Agriculture – Office of Inspector General, and the Federal Bureau of Investigation investigated the case. The Iowa Department of Agriculture and Land Stewardship (IDALS) revoked Haines' organic certificate in 2018 due to several NOP violations and assisted the federal agents in the investigation and the prosecution of the case. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
