ST. LOUIS — A Missouri woman nicknamed the "Madoff of the Midwest" for defrauding farmers of millions of dollars has reached a deal with prosecutors on state charges.
Grain dealer Cathy Gieseker, 45, of Martinsburg, is already serving a nine-year prison term after pleading guilty to federal mail fraud charges in November. Authorities say she bilked 179 farmers out of a combined $27.4 million.
Nanci Gonder, a spokeswoman for Missouri Attorney General Chris Koster, confirmed Thursday that a plea agreement on state charges has been reached but not signed. She declined to discuss details. The attorney general's office is handling prosecution of the case.
Gieseker's attorney, Travis Noble, did not return calls seeking comment.
At a court hearing on June 16 in Warrenton, a judge will decide whether to accept the plea agreement.
During the federal sentencing hearing in February in St. Louis, U.S. District Judge Charles Shaw ordered Gieseker to pay restitution. Gieseker apologized to the victims in court and pledged to do all she could to "make sure they are paid what they are owed." But state agriculture officials have estimated the victims will likely get about 2 percent of their losses back.
Gieseker and her husband, Timothy, ran T.J. Gieseker Farms and Trucking in Martinsburg. She continued the business after he died of cancer in 2007.
Prosecutors say Gieseker's scheme began in 2002. She told farmers she had contracts with Archer Daniels Midland Co. that would give them returns of 50 to 100 percent above market. ADM confirmed there was no such agreement, and Assistant U.S. Attorney Tom Albus said there was no evidence the company did anything wrong.
Instead, Gieseker sold the grain at spot prices. To keep the scheme going, she would sometimes pay inflated returns to some farmers as false evidence that she really had a contract, prosecutors said.
But other farmers started to worry as Gieseker kept putting off their payments, and eventually turned to regulators with the state agriculture department. An audit revealed financial irregularities.
The scheme has led some to refer to Gieseker as rural America's version of Bernard Madoff, the financier who pleaded guilty to bilking investors of billions of dollars. While the scale of Gieseker's theft didn't come close to Madoff's, many of her investors, like Madoff's, are facing financial ruin.
In a court document, prosecutors said 43 victims suffered losses in excess of $200,000, and seven suffered losses greater than $500,000.