By TIM ALEXANDER
Illinois Correspondent

PEORIA, Ill. — Lengthy prison sentences were handed down by both federal and state judges last week to the former president of A-Way Grain, Inc., and his wife, after the couple pled guilty to charges including felony theft, money laundering, bank fraud, embezzlement by a bank employee and two felony violations of the Illinois Grain Code.

Mikel Freeman, 57, and Dianne Freeman, 57, of Milford, Ill. were sentenced to federal prison terms on Monday, Sept. 21 in Peoria’s federal courthouse by U.S. District Judge Joe Billy McDade. The couple were also ordered to pay $4,839,858 in restitution to victims of the fraud scheme, announced Acting U.S. Attorney Jeffrey B. Lang, Central District of Illinois. The Freemans pled guilty in April to the charges, admitting they participated in a money laundering conspiracy involving $11 million that resulted in losses of nearly $5 million by A-Way Grain, Inc. and its stockholders, two central Illinois banks, the Illinois Grain Insurance Fund and others.

As part of the federal sentencing, Mikel Freeman, who owned and operated A-Way Grain, an employee-owned grain company with elevators in Crescent City and Onarga, must serve 120 months in prison. Dianne Freeman was sentenced to 97 months in prison. The couple will report Nov. 4 to begin serving their terms. Following their release, each must serve a three-year term of supervised release.
According to court records, the couple stole from A-Way investors by overstating the amount of grain stored in A-Way’s elevators for the purpose of loan collateral. Mikel Freeman would take checks for the company and deposit them into his own account or that of Freeman Trucking, Inc. or personal accounts at First Trust and Savings in Watseka, where Dianne Freeman was employed from 1982 to 2006.

Dianne Freeman, a bookkeeping manager for the bank, moved the money into other accounts held by the couple at the bank. She was also accused of taking cash from funds in a bank-owned ATM and a teller’s drawer. 

In 2006, Mikel Freeman transferred the accounts’ holdings to Commerce Bank in Bloomington at the same time Dianne Freeman resigned her position at First Trust and Savings. Mikel Freeman then opened a $5 million line of credit at Commerce Bank based on the amount of grain he indicated was stored at the elevators. An investigation by law enforcement officials, with help from the Illinois Department of Agriculture’s (IDOA) Bureau of Warehouses, revealed the financial assets of A-Way Grain were misrepresented.
Over $2.8 million was used from the Illinois Grain Insurance Fund to cover losses suffered by A-Way’s grain depositors. Stuart Selinger, IDOA Bureau of Warehouses chief, said the Freemans were ordered to make restitution to the fund. 

“Within the federal sentencing the Freemans were ordered to pay $4.8 million in restitution; of that amount $2.85 million is for (reimbursement of) the Illinois Grain Insurance Fund,” said Selinger, adding that the couple was ordered to surrender “50 percent of their disposable income” for restitution once they are released from prison.

Federal sentencing guidelines require the Freemans serve at least 85 percent of their sentences, meaning both would be in their mid-to-late 60’s before their possible release dates.

Testimony during the hearing indicated the Illinois Grain Insurance Fund had fallen below its mandated threshold due to the A-Way case, according to the Peoria Journal Star. Agricultural property owners, lenders and warehouse owners are being assessed an additional fee to cover the loss, Andy Kravetz reported.

According to testimony during their two-day federal sentencing hearing, some of the money owed to grain depositors was spent on a house and a $55,000 sport utility vehicle by the Freemans. 
On Tuesday, Sept. 22, Illinois Attorney General Lisa Madigan announced that Mikel Freeman entered guilty pleas in response to charges he sold grain he did not own, benefited by concealing the activity from the IDOA and used the money to pay business expenses or other ventures in which he had an interest.

“This defendant clearly defrauded the (IDOA) and took advantage of Illinois farmers whose products help drive our state’s economy,” said Illinois Attorney General Lisa Madigan, following the sentencing in Chicago. Circuit Court Judge Gordon Lustfeldt sentenced Mikel Freeman to 10 years on one count of felony theft and to concurrent terms of seven years each on two felony counts of violating the Illinois Grain Code. He will serve his state sentence concurrent with the 10-year sentence he received in federal court the day before.

Published on Sept. 30, 2009