By Ashley McLeod, Staff Writer
Nov 4, 2014, 15:44
The founder and president of local grocery chain Farmer’s Foods pleaded guilty in federal court last week on a charge of conspiracy to commit wire fraud.
John D. “Johnny” Farmer, along with co-conspirator John Morrell Palmer III, of Fredericksburg worked together to commit fraud against the Kellogg Company. Palmer was a former manager for Kellogg.
As an incentive for grocers to buy in bulk, Kellogg offers an incentive program where the grocers receive deductions from SuperValu, a wholesaler that sells products from Kellogg’s. Between 2009 and 2013, Farmer and Palmer worked together submitting fraudulent documents claiming sales that never took place in order to receive a higher deduction from the program. Farmer’s Foods was awarded deductions approximating $1.8 million from false paperwork through this program.
With his position at Kellogg’s, Palmer was able to push the false paperwork through in the incentive program, and in exchange was paid cash from Farmer, which totaled almost half of the $1.8 million of false deductions.
Farmer is scheduled to be sentenced in United States District Court on January 22, 2015. Palmer was recently sentenced to twelve months and one day in prison, with three years of supervised release after finishing his sentence.
Food Depot, which had been in the Crossings shopping center in Prince George since 2010, filed for bankruptcy and closed earlier this year. The store was owned by Farmer and was previously a Farmer’s Foods.
