Multinational Corporation, Multiple Individuals Charged in Organic Grain Fraud Scheme

Two Dubai entities and several individuals were charged in an indictment unsealed in the District of Maryland for their roles in a multimillion-dollar scheme to export non-organic grain into the US to be sold as certified organic.  

Dubai-based Hakan Agro DMCC and Hakan Organics DMCC, and Goksal Beyaz, Nuray Beyaz, and Mustafa Cakiroglu, all located in Turkey, were all charged with conspiracy, smuggling, and wire fraud.  

The indictment alleges that between November 2015 and May 2017, the defendants operated a scheme where Hakan Agro, Hakan Organics, and associated entities would purchase non-organic soybeans and corn from Eastern Europe before having it shipped to the US as “organic.” This scheme allowed the defendants to charge the higher prices associated with organic grains (as much as 50% more than conventional grains). 

Among other misconduct, the indictment alleges: 

In late 2015, the defendants obtained non-organic, non-GMO soybeans from Ukraine for $423 per metric tn (MT). The defendants arranged to have the same soybeans shipped to Baltimore, where they were sold as “organic soybeans” for $614/MT, totaling more than $4.9M.  

In early 2016, the defendants arranged to purchase non-organic corn for $168/MT and have it delivered to Constanta, Romania. Simultaneously, they arranged to sell the same corn from Constanta through Baltimore as “organic corn” for $247/MT. The invoices for this falsely labeled corn totaled over $3.3M.  

In late 2016, the defendants shipped 16,250 MT of non-organic soybeans falsely labeled as “organic” from Turkey to the US, where they were sold for more than $10M.

In early 2017, the defendants arranged for 21,000 MT of non-organic corn to be shipped to the US, falsely labeled as organic. The invoices for the falsely-labeled corn totaled more than $6.7M.  

In early 2017, the defendants arranged for a load of non-organic soybeans to be shipped from Turkey to Baltimore falsely labeled as “organic” soybeans.  

Wire fraud and smuggling are each punishable by a maximum penalty of 20 years in prison. Conspiracy is punishable by a maximum penalty of five years in prison. Upon conviction, a federal district court judge would determine any defendant’s sentence after considering the U.S. Sentencing Guidelines and other statutory factors.  

The U.S. Department of Agriculture, Office of Inspector General investigated this case.