ST. LOUIS — A former Missouri grain dealer already in federal prison for duping roughly 180 farmers out of $27 million has been sentenced to 10 years on state charges in the swindle that landed her the moniker the "Madoff of the Midwest."
Cathy Gieseker, 45, of Martinsburg closed out what prosecutors have called the biggest grain fraud scheme in Missouri's history, pleading guilty Wednesday in Warren County to a felony stealing count and four felony counts of filing false statements with the state Department of Agriculture. Prosecutors dropped seven other counts.
Gieseker was sentenced to 10 years on the theft charge and seven years apiece on the others, with those terms to be served simultaneously with each other and with a 9-year federal sentence she got in February on mail-fraud charges.
The judge credited Gieseker with time already served, meaning it was unlikely she would serve additional prison time beyond her federal sentence.
Gieseker accepted responsibility and the sentence, her attorney said Thursday while acknowledging that "there are a lot of people upset — farmers, based on the letters I've read — with the outcome of the case, thinking the sentence was too light."
When sentenced on the federal charges months ago,Gieseker was ordered to pay restitution and 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.
Messages left Thursday with some of the affected farmers were not immediately returned.
Gieseker ran a trucking company in Martinsburg with her husband, and she pressed on with that business after he died in 2007. As a grain dealer, the widow served as broker between farmers in northeast Missouri and buyers in St. Louis; Louisiana, Mo.; Mexico, Mo.; and Quincy, Ill.
As part of the scheme that prosecutors said dates back to 2002, Gieseker told farmers she had contracts with Archer Daniels Midland Co. that would give them returns of 50 percent to 100 percent above market. Archer Daniels Midland Co. confirmed there was no such agreement, and a federal prosecutor said there was no evidence the company did anything wrong.
Instead, prosecutors said, Gieseker sold the grain at spot prices and, to keep the scheme going, would sometimes pay inflated returns to some farmers as false evidence that she really had a contract. Others earned nothing in what authorities call a classic Ponzi, or pyramid, scheme.
When other farmers began worrying as Gieseker kept putting off their payments, they turned to state regulators. 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. Although 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 more than $500,000 in losses.