Monday, December 20, 2021

Express Grain Update: Fraud!

Express Grain submitted falsified financial statements to the Mississippi Department of Agriculture and Commerce when it renewed its license each year. Commissioner Andy Gipson stated in a letter sent to Lieutenant Governor Delbert Hosemann and Senate Agriculture Committee Chairman Senator Chuck Younger last Friday:

we learned of discrepancies between the information filed with the Mississippi Department of Agriculture and Commerce and information other interested parties had reviewed. On the evening of Thursday, December 16, 2021, I learned that the financial documents and audit opinion(s) filed by Express Grain Terminals, LLC with the Department were materially different than documents reviewed by and certified by their independent accounting firm....

Grain elevator operators are required to obtain a license from the state of Mississippi each year. They must pay a fee and submit audited financial statements. Unfortunately, it appears the Greenwood grain elevator submitted bogus financial statements when renewing its Mississippi license.

The Commissioner demanded Friday that Express Grain's independent auditor, Horne CPA Group, provide all audited financial statements since 2018. Horne immediately complied and submitted the requested financial statements that day. The Horne audits seem to confirm the worst fears in the Express Grain debacle.  The letter continued:

A preliminary review of the documents filed via e-mail with this Department by Express Grain Terminals, LLC; contrasted with the purported actual documents received today from the accounting firm, would tend to indicate a willful falsification of material facts, including falsified financial statements and a materially altered auditor's opinion(s), by Express Grain Terminals, LLC. I have notified the Office of the Mississippi Attorney General.

Express Grain Terminals opened in 2007 and is a major grain elevator for farmers in the Mississippi Delta. Dr. Michael Coleman and his son John Coleman own Express Grain Terminals although John's share is 1%.  Express Processing open in 2015 and Express Biodiesel opened in 2018. Express Grain owns the other two companies.

Express Grain ran into some financial trouble a year ago. Several farmers complained to MDAC in December 2020 that checks for their harvest bounced. However, the company made good on the checks.


Express Grain President John Coleman assured farmers everything was okay and a September 28 letter:

UMB Bank sued the company for fraud on that day as well in Leflore County Chancery Court.  UMB issued a $40 million revolving loan and a $35 million term loan to the defendants. The bank extended the loans several times this year. The bank allegedly caught the company submitting false financial statements. UMB declared Express Grain in default on loans of $71 million And filed a lawsuit. Earlier post. 

Express Grain filed a petition for Chapter 11 bankruptcy the next day. 

 The company reports total liabilities of $106 million in assets of $101 million. However, the company owes another $9 million to farmers. The secured claims are $70 million while unsecured claims are $36 million.  Total amount owed to farmers is $41 million.  The top twenty unsecured creditors report  claims of over $23 million. 

 The damage does not stop with farmers losing their crops. More than a few banks place liens on harvests when farmers borrowed against them. The bankruptcy means those banks could lose the collateral on those loans.

Some farmers have gone to court to get their harvests back. They accused the bank of keeping the broke borrower afloat just long enough to steal the harvests delivered to the grain elevator without paying for them Earlier post. 


Anonymous said...


Anonymous said...

If KF ferreted this out there is probably a grain of truth to it.

Anonymous said...

But it is the bank's fault.

Anonymous said...

Not the banks fault that crooks ran the place. Just the bank’s criminal action to protect itself after the fact.

Anonymous said...

Only source of extra funds which may be applicable are insurance policies covering the farmers or the operators of the grain company.

Doubt there is 40 mm worth of coverage but every little bit helps.

Anonymous said...

Farming is such a welfare pyramid scheme. We need to stop subsidizing farming. 500% increase in farm subsidies since 2017 from $4billion to $20billion dollars.

I can't even fathom that number and it seems so small to us now.

Anonymous said...

Regardless of who used them, why are terms like 'worst fears' and 'unfortunately' used in these documents or narratives used in their reference?

Whether Kingfish will say, "Hey, I just copied and pasted it" or whether Ag-Hat made the statements (can't tell) or whether Horne inserted them in its opinion....they're totally out of place. It's not my job to figure out who said what in all these convoluted threads on this blog. I'm just here to state my opinion. You need a Blog-Forensicologist to keep track of who said what (or either a dart-board).

Anonymous said...

Then what is your point @10:48 beyond complaining again?

Anonymous said...

It's hard to believe Dr. Michael Coleman and son John Coleman are still living in the delta. I would be concerned if I was them. If there is any justice in this world .............

That'sMisterDeplorableToYou said...

I hear the Maldives are nice. No extradition treaty with the US either.

Anonymous said...

@9:53 am, accelerating a loan in default and asserting a perfected security interest are not crimes. Both are authorized by MS statutory law.

Anonymous said...

Sounds like the Commissioner of Agriculture is CYA.

Anonymous said...

11:55 - thank you, Kingfish, for your opinion, again. Not once will you address the point though.

Anonymous said...

Regulating grain elevators is actually part of the duties of the Commissioner when is not headlining at ant-vax, anti-choice rallies.

Kingfish said...

Seriously? You really think it was me? Are you that dumb? 10 to 12,000 people read this website every day. Guess what? They're going be more than a couple of people who have a different opinion than you do.

Anonymous said...

All is ok. EXPRESS grain asked the bankruptcy Court for permission to borrow another $30 million, according to news sources, to continue operations, particularly with their soybean crushing operation.

Any new soybeans purchased will be paid for - in cash!

Anonymous said...

The entire thing is a disaster. Take it from Someone involved… this whole thing was orchestrated, planned far in advance and it seems that Craig Geno and the UMB lawyers have been working together the entire time. Each chess piece has been played out perfectly. The farmers won’t see a penny. It’ll devastate the economy in the delta, and it’s disheartening to read in the comments how much people hate farmers.

Anonymous said...

@8:05 I come from a farm family. My mom's folks have been farming since the 1800's. They still farm today. My in-laws are in agriculture. So I don't hate farmers.

But I've owned a business. I had to compete and bust my tail every day. There were no government handouts or subsidies. It was make the business work or go broke. I can tell you that I see the wealth my uncle has amassed by farming while working less hours than I did. And then I have to listen to him lament about "us poor farmers". All that time I'm thinking that I have less wealth, working harder and more hours, because I don't get a government check.

I've gotten stuck by clients before. I've done the work, produced the invoice, and they didn't pay. But nobody bailed me out. I simply lost and walked away from that client, or sued and tried to collect. That's business.

Anonymous said...

@6:04 PM what IS the point?

That'sMisterDeplorableToYou said...

The Most Southern Place On Earth, by James C. Cobb, is an excellent and very enjoyable history book of the Delta from its beginnings as an uninhabitable swamp through the civil rights era.

From the book: "Cotton obsessed, Negro obsessed," Rupert Vance called it in 1935. "Nowhere but in the Mississippi Delta," he said, "are antebellum conditions so nearly preserved." This crescent of bottomlands between Memphis and Vicksburg, lined by the Yazoo and Mississippi rivers, remains in some ways what it was in 1860: a land of rich soil, wealthy planters, and desperate poverty--the blackest and poorest counties in all the South. And yet it is a cultural treasure house as well--the home of Muddy Waters, B.B. King, Charley Pride, Walker Percy, Elizabeth Spencer, and Shelby Foote. Painting a fascinating portrait of the development and survival of the Mississippi Delta, a society and economy that is often seen as the most extreme in all the South, James C. Cobb offers a comprehensive history of the Delta, from its first white settlement in the 1820s to the present. Exploring the rich black culture of the Delta, Cobb explains how it survived and evolved in the midst of poverty and oppression, beginning with the first settlers in the overgrown, disease-ridden Delta before the Civil War to the bitter battles and incomplete triumphs of the civil rights era. In this comprehensive account, Cobb offers new insight into "the most southern place on earth," untangling the enigma of grindingly poor but prolifically creative Mississippi Delta.

Anonymous said...

I don't have any skin in this game but I can't help but think a "Yellowstone" train station type scenario is gonna go down in the MS Delta sometime soon...

Anonymous said...

@8:05 If you think government subsidies “amasses wealth”, you are clearly ignorant of the situation regarding government payments. With great risk comes great reward, along with great loss. In a 60 second hurricane force wind, in a single day with 8 inches of rain, tornadoes, droughts, and backwater pumps that aren’t turned on, farmers can lose an entire crop. An act of nature is one thing, theft is another. America relies on farmers, so educate yourself about government payments before you throw it in our faces.

Anonymous said...

@11:31 Okay. Fair point. I also owned a business. In a single day, my business could also be wiped out by something similar that is out of my control. If that happens, I lose everything. And there is no government subsidy. And America relied on my business also.

I had risk also. I worked harder than farmers, and longer than farmers. And made less money. So why do they need government help?

Why does the business of farming get different treatment?

Anonymous said...

You’ll never make me believe you work harder than a true farmer, maybe not a gentleman farmer who has a bunch of yes men working for him, but not someone who lives and breathes it. Someone who was born into and it runs through their blood. You never leave it. You can’t. I’m not saying you don’t work hard. I’m proud to hear someone arguing for how hard they work, because the world we live in now is full of people who want a government handout. But there are government subsidies for each business in the form of tax breaks, sba loans with low interest. They just look different, and if you got a PPP loan, you got a government subsidy. It’s not all cut and dry. Kudos to you for working hard, for having a business and being a part of capitalism. We can agree to disagree, and that is the beauty of the free world we live in. I think most people can attest to this and will agree with me when I say that if the farmer suffers, America suffers. Same goes for small business owners… so we’re in the same boat. I wish you success with your business. Merry Christmas.

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