Express Grain CEO May Avoid Trial

Former Express Grain CEO Accused of Defrauding Farmers May Avoid Trial in Mississippi

Todd Neeley
By  Todd Neeley , DTN Environmental Editor
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The former CEO of soybean processor Express Grain in Mississippi may avoid a trial after being indicted on wire fraud. (DTN file photo)

LINCOLN, Neb. (DTN) -- The former CEO of Greenwood, Mississippi-based Express Grain may avoid trial on charges of wire fraud, as attorneys for John R. Coleman asked for a motion to continue his trial scheduled for Aug. 14.

Coleman was arrested in December 2022 after a federal grand jury issued a six-count indictment on Nov. 15, 2022, on wire fraud charges in connection with the company's ongoing Chapter 11 bankruptcy. Coleman also was indicted by a state grand jury on Nov. 29, 2022.

The federal grand jury accused Coleman of defrauding farmers, banks and the Mississippi Department of Agriculture.

On Monday, attorneys for Coleman indicated in a motion to continue the trial date to either October or November that the case may not go to trial.

"Undersigned submits after conference with the government, there is no objection to this request and counsel believes a trial may not be required," Coleman said in his motion filed in the U.S. District Court for the District of Northern Mississippi.

Coleman's attorneys said the continuance was also requested because his defense team received "hundreds of gigabytes" of documents and files to review before a trial could take place.

In addition, the motion said Coleman has been listed as a defendant in another case pending in Leflore County Chancery Court.

From June 2018 to October 2022, the federal indictment said, Coleman schemed to "obtain money by means of false and fraudulent pretenses, representations and promises. John R. Coleman intentionally misled farmers, lenders and the Mississippi State Board of Agriculture to induce them to deliver grain to Express Grain, lend money to Express Grain and provide Express Grain with warehouse licenses despite Coleman's direct knowledge that Express Grain was in severe financial distress."

According to the federal indictment, beginning in 2018, Coleman made "material changes" to his company's audited financial statements for 2017, including the removal of the "emphasis of matter regarding going concern" paragraph.

On or about June 7, 2018, Coleman emailed the altered financial statements to the Mississippi Board of Agriculture "claiming that they were the legitimate financial statements" of the company.

The federal indictment alleges Coleman made the same changes to Express Grain's financials in 2018, 2019 and 2020. He then emailed those statements to the state to renew his grain warehouse license.

On or about Sept. 4, 2021, Coleman allegedly emailed fraudulent financial statements to Kansas City, Missouri-based UMB Bank.

On Sept. 22, 2021, UMB Bank requested a warehouse receipt report showing the amount of grain held by the company that "had been pledged as collateral to UMB Bank" as well as the amount of grain pledged or sold to third parties.

In one instance, Coleman claimed 100,000 bushels had been sold to FC Stone in a purchase and sale agreement. But in reality, the indictment said, 2.78 million bushels had been sold to FC Stone for a difference of $30 million.

UMB Bank issued a notice of default to Express Grain demanding the immediate payment of about $70.7 million.

Express Grain filed for bankruptcy on Sept. 29, 2021, according to court records.

Though farmers lost tens of millions of dollars, court records indicate farmer creditors will divide just $9 million as part of a settlement.

In February 2022, UMB Bank purchased Express Grain at auction for $25 million, according to court records. UMB bought three storage warehouses and a soybean-processing plant. The purchase reduced the company's debt to the bank to $45 million.

Read more on DTN:

"Former MS Grain Company CEO Indicted,"…

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Todd Neeley

Todd Neeley
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