‘Spiked’ soybeans land a former Iowa co-op manager in prison, feds say

When a soybean customer discovered oats hidden in truckloads of grain, it uncovered a grain cooperative conspiracy that led to a federal investigation, authorities say.

Now a former manager of the co-op is going to prison.

In March 2017, the customer complained about soybeans “spiked” with oats in 30 truckloads ordered from a South Dakota warehouse. At the time, a bushel of oats sold for $2.39 while soybeans cost $9.69 per bushel.

Afterward, a manager called Calvin Diehl, a high-level manager in the Iowa grain cooperative with locations in South Dakota, and asked him to stop instructing his employees to blend oats, authorities say.

“Someone can go to jail for this,” the manager said, according to authorities.

Diehl “feigned surprise” and promised to stop, authorities say. However, he continued mixing the products — even selling another “spiked” load to the same customer, authorities say.

Later that month, U.S. Department of Agriculture inspectors conducted a planned inspection of a cooperative in Iowa. During the inspection, the cooperative had oats in plain view, prompting a manager to call Diehl for advice, authorities say. He instructed the manager to cover the oats with soybeans, authorities say.

After learning about the scheme, the USDA searched grain bins at locations in South Dakota and Iowa. Their inspection revealed nearly 88,000 bushels purported to be soybeans contained only about 34,000 bushels of the grain, authorities say.

Diehl, 60, was sentenced Tuesday to three months in federal prison after he pleaded guilty to conspiracy to defraud the U.S., according to the U.S. Attorney’s Office for the Northern District of Iowa.

In November, Kenneth Ehrp, a former officer in the grain cooperative, pleaded guilty to the same charge, the Sioux City Journal reported.