OMRI Announces California Liquid Fertilizer Verdict

(March 1, 2012) In a federal court last week, Peter Townsley quietly entered a plea of guilty to two charges of mail fraud in connection with his former company, California Liquid Fertilizer. The charges involved false information that Townsley submitted as part of his company's application for OMRI listing, part of a 2009 fertilizer scandal that not only tainted the organic industry at the time, but also resulted in lasting changes to the input review process in California and throughout the country. Although this type of fraud is very rare, OMRI's Executive Director/CEO Peggy Miars hopes that this will discourage potential criminals from targeting the organic industry.

"We are certainly relieved that this lengthy process is over, and that justice was served," said Miars. "A lot of the credit for this success should go to the U.S. Attorney's Office, where countless hours were spent putting together a detailed and thorough case against Mr. Townsley and the others who committed this fraud."

California Liquid Fertilizer is one of three suppliers implicated in the California fertilizer spiking scandal in early 2009. At that time, it was discovered that these fertilizer companies were selling fertilizers for organic production that were intentionally spiked with prohibited synthetic ingredients. Organic producers were generally unaware of the added ingredients, but the companies in question made a significant profit by selling the products as compliant with organic standards. Although all of the companies implicated have since disbanded, the U.S. Attorney's Office continues to pursue charges against the individuals responsible for this fraud.

According to the Department of Justice Press Release, "In pleading guilty, Mr. Townsley admitted that while he was operating his business, California Liquid Fertilizer ("CLF"), in the Salinas Valley, he engaged in a scheme to defraud his organic farmer customers by misrepresenting the true ingredients in CLF's fertilizer, Biolizer XN.  CLF marketed Biolizer XN as an organic fertilizer that was approved for use in organic agriculture.  In entering his guilty pleas, Mr. Townsley admitted that from April 2000 through December 2006, he sold Biolizer XN with a label that claimed it was approved for use in organic farming when it actually contained chemical ingredients that were prohibited for use in organic farming.  During that period, CLF realized over $6.5 million in gross sales from the sale of Biolizer XN." See the full text of the press release here.

The sentencing of Mr. Townsley is scheduled for June 13, 2012, before Judge Charles R. Breyer in San Francisco.  The maximum statutory penalty for each violation of Section 1341 is 20 years imprisonment, a $250,000 fine, three years of supervised release, and a $100 special assessment.

For OMRI, the plea signifies a just end to a long and very public scandal that continues to affect the organic industry today. As a result of these events, the National Organic Program now requires two annual inspections on every liquid fertilizer with over 3% nitrogen. The State of California also implemented a new law last year, requiring every organic fertilizer company selling compliant products in California to undergo an additional state review and registration. This law places an additional burden on fertilizer companies who focus on the organic market, many of whom also pay for listing with OMRI or another material review organization. Although the CDFA registration process includes a review of the product formulation, most certifiers and the National Organic Program do not currently accept CDFA registration as proof of organic compliance.

For more than a decade, OMRI has played an integral part supporting the organic industry and the certification process. Miars emphasizes that any companies that consider including false information on their OMRI application should think again. "The National Organic Program and the organic industry have called this the Age of Enforcement. OMRI will not be an exception. Everyone is aware that organic integrity starts with inputs, and OMRI and the rest of the organic industry are prepared to use whatever resources are necessary to protect that integrity."

Contact: Peggy Miars
541-343-7600 x.102

Founded in 1997, the Organic Materials Review Institute (OMRI) provides organic certifiers, growers, manufacturers, and suppliers an independent review of products intended for use in certified organic production, handling, and processing. OMRI is a 501(c)(3) nonprofit organization. When companies apply, OMRI reviews their products against the organic standards. Acceptable products are OMRI Listed® and appear on the OMRI Products List. OMRI also provides subscribers and certifiers guidance on the acceptability of various material inputs in general.