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Bill to raise penalty for 'crooked' grain buyers clears SD Senate committee

Supporters say by increasing grain violations to the state's catalog of theft statutes, the perpetrators in the $5 million H&I Grain fiasco would have faced stiffer penalties.

FSA South Dakota capitol

PIERRE, S.D. — A bill targeting what one state official called "crooked grain buyers" passed the South Dakota Senate judiciary committee on Tuesday, Feb. 22.

Tom Deadrick, a litigator with the Attorney General's Office, said they'd brought the bill thanks to an " illustrative case " in eastern South Dakota.

Between 2016 and 2017, the H&I Grain operators in Hetland, South Dakota stole nearly $5 million from dozens of farmers grain while the operators ran a commodities hedging campaign, according to state law enforcement officials. In September, Jared and Tami Steffensen pleaded guilty to one count of theft by deception and were sentenced to five years each in prison. A third person, JoAnn Steffensen, pleaded guilty to one count of failure to notify the PUC of insolvency and received jail time.

According to the AG's office, the three are "jointly and severally liable" for restitution to 38 victims in the amount of $4.9 million.

Deadrick's bill, he said, would better link grain crime with appropriate punishment than is currently available in state statute.

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"The beauty of the theft statute is that the crime and the time kind of go together," said Deadrick.

Current law says grain violations that result in a loss of revenue are guilty of a Class 6 felony. Class 6 are the least severe felony penalties in South Dakota, punishable by up to two years imprisonment or $4,000 fine. Under House Bill 1037, a violator would be guilty of theft.

In the H&I case, Deadrick said prosecutors were stymied by the high burden of reaching the intent standard in the "theft by deception" statute.

"If you're hedging commodities," said Deadrick, "no one thinks you're going to lose money."

PUC Chairman Nelson told the committee on Tuesday that he recalled a meeting with farmers who had lost "hundreds of thousands of dollars" from H&I's operators.

"If we can do something to make sure justice is brought in those instances, I'm all about that," said Nelson.

"This change will help to bring justice for farmers who've had grain or money stolen from them by crooked grain buyers."

The measure, which had previously passed unanimously out of the House, was approved on a vote of 7-0.

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The bill now proceeds to the Senate floor.

Christopher Vondracek is the South Dakota correspondent for Forum News Service. Contact Vondracek at cvondracek@forumcomm.com , or follow him on Twitter: @ChrisVondracek .

MORE FROM CHRISTOPHER VONDRACEK:
The state's biggest political leaders have touted inbound migration, so-called "blue state refugees" who flooded South Dakota. But the biggest driver of partisan races this coming summer and fall appears to be a redistricting process, log-jamming Republicans in primaries and opening up new turf for Democrats.

Christopher Vondracek covers South Dakota news for Forum News Service. Email him at cvondracek@forumcomm.com or follow him on Twitter at @ChrisVondracek.
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