USDA issues two Packers and Stockyards complaints
Both violations of the P&S Act occurred in August.
The U.S. Department of Agriculture (USDA) issued a complaint against Wright Livestock Inc. (Wright Livestock) and Rodney J. Wright (Wright) of North Platte, Neb., on Aug. 22, 2022, for alleged violations of the Packers and Stockyards (P&S) Act.
An investigation by USDA’s Agricultural Marketing Service (AMS) revealed that during the period on or about November 2019 through February 2020, Wright, on four occasions, instructed a livestock auction to sell his livestock under a name not associated with his registration/bond or with anyone who had ownership. Wright collected the proceeds from the sale in Wright Inc.’s name
Selling livestock under false or fictitious names and creating records that are not an accurate representation of livestock ownership is considered a deceptive practice in violation of the Packers & Stockyards Act.
The P&S Act requires subject entities to keep and maintain records that fully and correctly disclose all the transactions involved in their business as livestock dealers.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $29,616 per violation against any person after notice and opportunity for a hearing on the record. If the allegations are admitted or proven in a hearing, Wright and Wright Livestock may be ordered to cease and desist from continuing to violate the P&S Act, and they may be assessed a civil penalty.
In addition, USDA entered into a stipulation agreement with Tri-County Livestock Exchange Inc. (Tri-County) and Larry Congleton (Congleton) of Campbellsburg, Ky., on Aug. 18, 2022, for alleged violations of the P&S Act. Under the terms of the stipulation, Tri-County and Congleton waived their rights to a hearing and paid a penalty of $1,000.
An investigation by USDA’s Agricultural Marketing Service (AMS) revealed that Tri-County failed to maintain its custodial account, resulting in custodial shortages of $5,065 on Jan. 31, 2022, and $14,143 on Feb. 28, 2022. The custodial shortages resulted from the failure of Tri-County to reimburse its custodial account timely.
A custodial account is a trust account designated for shippers’ proceeds from the sale of livestock in trust for sellers. Failure to reimburse the custodial account timely and operating with custodial account shortages is a violation of the P&S Act and places livestock sellers at risk of not being paid timely or at all.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $29,616 per violation against any person after notice and opportunity for a hearing on the record. USDA may offer alleged violators the option of waiving their right to a hearing and enter into a stipulation agreement to resolve alleged violations quickly.
The P&S Act is a fair-trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat, and poultry industries.
For further information about the Packers and Stockyards Act, contact Kraig Roesch, Packers and Stockyards Division, at (303) 375-4291 or by email at kraig.roesch@usda.gov.
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