Nebraska Beef Ltd. and two of its former employees are severing some probation time and paying some fines for falsifying USDA grading records.

U.S. District Court for Nebraska has apparently concluded the case with a $200,000 fine and a year’s probation for the Omaha-based meat processing company. Earlier plea agreements resulted in 2019 in $1,000 fines for James Timmerman, 50, and Dolese Tippery, 61, both former Nebraska Beef employees.

Timmerman, Nebraska Beef’s CFO, was sentenced to two years probation, and Tippery got six months probation. To settle a civil case, the company also agreed to pay $550,000 in additional payments.

The case reportedly stems from a 2016 Grand Jury subpoena for Nebraska Beef to produce grading records for 50 carcasses of beef, which were altered before they were provided to the beef company’s attorneys for submittal.

While it’s unclear as to why the conclusion of this case has taken so long, the reasoning behind the charges is found in the six-year-old Timmerman plea bargain. It says:

“The defendant understands that the offense to which the defendant is pleading guilty has the following elements:

I. Defendant knowingly represented that an agricultural product had been officially inspected or graded by an authorized inspector or grader;

2. That the agricultural product was subject to inspection or grading under Title 7, United States Code, Section 1622; and

3. That the agricultural product had in fact not been graded or inspected as represented by Defendant.”

The plea bargain went on to explain the case this way:

Background
I. A food processing company located in Omaha, Nebraska, (the “Food Processing Company”) slaughters thousands of heads of cattle a month for purposes of the sale of beef products to the public. (the Food Processing Company is Nebraska Beef.)

2. The defendant, James Timmerman, was employed by the Food Processing Company between 1995 and 2019. Between 2015 and 20 I9, the defendant was the Chief Financial Officer (CFO) of the Food Processing Company. As CFO, the defendant’s duties and responsibilities included the keeping, maintaining, and oversight of grading records at the Food Processing Company.

3. The United States Department of Agriculture (USDA) through its Agricultural Market Service (AMS) provides beef grading services to packing plants by supplying professional graders who grade beef at the facility.

4. One of the ways that beef is graded is by its “quality.” The majority of packing plants usually request grading for cattle carcasses that qualify for the three top grades, which are “Prime,” “Choice,” or “selec.” Generally, if the cattle carcass does not qualify for one of these three quality grades, the beef is considered ungradable, and is designated as “No-Roll.” Prime is the highest quality grade of beef and is usually the most expensive. Beef that is determined to be No-Roll is in most cases significantly less expensive than Prime, Choice, and Select grades of beef.

5. As part of the grading process, an official USDA metal stamp is typically used to place the determined grade, that is, either Prime, Choice, or Select, on the cattle carcass in front of an ink impression. This ink impression is considered an “official” mark of the USDA grading system and is required on all gradable cattle carcasses.

6. Cattle carcasses processed at the Food Processing Company are subject to inspection or grading under Title 7, United States Code, Section 1622.

7. That in as early as 2012 the Food Processing Company, through its senior employees who are known to investigators, was involved in a scheme to relabel, as upgraded beef, certain beef processed at the Food Processing Company intended to be sold to its customers.

8. Boxes of beef processed at the Food Processing Company’s main plant would be labeled initially with the correct grade or designation of beef such as No-Roll and Select. The boxes of beef would then be transported in tractor-trailer-sized loads to an offsite warehouse controlled by the Food Processing Company. At the offsite warehouse, a crew of Food Processing Company employees would remove original labels on the boxes of beef and replace them with higher grade labels such as Choice and Prime. The relabeled product was then returned to the Food Processing Company and put into inventory. Food Processing Company employees, known to investigators, including the defendant, at a point, knowing that the relabeling was occurring, created false internal Food Processing Company records to conceal the scheme from ever being discovered. This allowed the Food Processing Company to realize greater revenues by selling lower-grade meat at higher-grade prices.

9. In February 2012, as a result of a USDA investigation, the Food Processing Company temporarily discontinued the relabeling scheme. However, in the fall of 2012, the Food Processing Company, through a senior corporate officer who is known to investigators, told Defendant that the Food Processing Company would start relabeling again, but that it would be done in a different way. Defendant and another employee, known to investigators, were directed by a senior corporate officer, known to investigators, to change production reports, which would make it appear the relabeled boxed beef was labeled accurately.

I0. Under the updated relabeling scheme, using dummy shipping/customer codes, boxes of beef from the food processing company were taken to a building located at 24th and Lake, Omaha, NE, and relabeled during the night. The boxes of beef would be taken to an offsite warehouse and scanned into inventory, then returned to the food processing company. The defendant would make changes to the food processing company’s production reports based on the dummy codes.