Farm Horizons, August 2011
Winsted Farmers Elevator’s license revoked, major shareholder arrested
By Ivan Raconteur
The Minnesota Department of Agriculture (MDA) revoked the grain buyer’s license of the Winsted Farmers Elevator due to breach of contract in June, according to Liz Erickson, communications coordinator with the MDA.
The elevator purchased grain from farmers, but failed to pay them, according to the MDA.
Erickson explained that the MDA received valid claims against the grain buyers’ bond of Winsted Farmers Elevator, 121 Baker Avenue in Winsted.
The MDA had received a claim that a seller had not been paid.
The MDA determined that the claim was valid, and notified the Winsted Farmers Elevator of the situation. From that point, the company had 15 days to pay the sellers.
The sellers were not paid, which constitutes a breach of contract on the part of Winsted Farmers Elevator.
As a result, the company’s license to buy grain was revoked.
Since the initial claim was filed, the MDA has received several additional claims, but is not able to release specific numbers at this time.
Claims had to be submitted to the MDA by Aug. 12.
A decision of disbursements of valid bond claims was expected to be made by Friday, Aug. 26.
Even though there is a grain bond in place, sellers may not be able to recover the full amount of their claims.
Erickson said the company’s grain bond is only $20,000. If the amount of the valid claims exceeds the bond amount, claimants will be paid on a pro-rated basis.
If they are not able to recover the full amount they are due from the bond company, they will need to pursue the matter in the public courts.
In addition to the non-payment issue, there is a storage issue.
Farmers who had grain stored at the elevator learned that the grain is gone.
If a facility is storing grain, and is not licensed to do so, it is doing so illegally, Erickson said.
She explained that separate licenses are required for buying and storing grain.
Erickson encourages anyone who is thinking of selling or storing grain to go to the MDA website to find out if a company is licensed, and what it is licensed for. A link is available at www.heraldjournal.com.
“It is a ‘buyers beware’ situation,” Erickson said.
According to the MDA website, the only licenses held by the Winsted Farmers Elevator were a grain buyer license and a commercial feed license.
Anyone who was not able to recover grain that was stored at Winsted Farmers Elevator will need to seek remedy through the courts, Erickson said.
A mortgage taken out by the Winsted Farmers Elevator in 2010 shows Sunil V. Sapatnekar is the treasurer for the business.
Herald Journal contacted Bill Graham, the manager of Winsted Farmers Elevator, by telephone. He declined to comment.
Shareholder arrested, records confiscated
Winsted Police Department, assisted by the McLeod and Carver county sheriffs’ offices, executed several search warrants July 27 on Sunil Sapatnekar, a major shareholder in the Winsted Farmers Elevator, according to Police Chief Mike Henrich.
Henrich said that he had 19 complaints from farmers who had taken their grain to the Winsted Farmers Elevator, only to discover the grain was missing, or the grain was sold without the farmer being reimbursed for it.
Sapatnekar was arrested July 27 on felony theft related to the Winsted Farmer’s Elevator, but released July 28, according to Henrich, who said it would take time to search through all of the information confiscated, and process a formal complaint.
Henrich is currently working with Carver County Investigator Pat Barry to investigate the matter fully.
Henrich expressed his appreciation for Carver County Sheriff Jim Olson, who assigned Barry to help with the case.
Henrich noted that Detective Barry’s experience in investigating financial crimes has been invaluable in this case.
Henrich said farmers in McLeod, Carver, and Wright counties have been affected.
The warrant was first served at approximately 7 a.m. July 27 at Sapatnekar’s residence at 2110 Weber Hill Road in Orono. The police confiscated his computer, and financial records including bank, payroll, taxes, invoices, and accounts receivable.
Other search warrants were served at other businesses owned by Sapatnekar, which include Buffalo Quality Feed, Bjorkland Trucking, and B&B Pallets, all located in Buffalo.
According to the Winsted Centennial Book, published in 1987, the Winsted Farmers Elevator was built in 1918, along the Chicago Northwestern Railway.
It was incorporated as the Winsted Farmers Elevator Company March 27, 1945.
The feed mill was added to the elevator in 1957.