John Coleman, the beleaguered president of Express Grain Terminals, has been accused by federal and state law enforcement of numerous counts of fraud relating to the demise of his company.
Coleman, 46, was arrested Tuesday morning by agents with the state Attorney General’s Office and brought to the Leflore County Jail, where he immediately posted bond and was released.
Then, as first reported by The Taxpayers Channel, Coleman was arrested by an FBI special agent Tuesday afternoon and arraigned at the federal courthouse in Greenville. He pled not guilty and posted bond of $50,000.
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The federal indictment said Coleman’s “fraud and the subsequent Express Grain bankruptcy caused widespread financial hardship for hundreds of Farmer Victims throughout the Mississippi Delta who had not been paid for the grain they had physically delivered to Express Grain.”
In the state indictment issued Nov. 29 by a Leflore County grand jury, Coleman has been charged with five counts of making false representations to defraud government and one count of false pretenses, according to a release from the state Attorney General’s Office.
The federal indictment, issued Nov. 15, charges Coleman with six counts of wire fraud for a “scheme” that Coleman conjured to defraud farmers, the Mississippi Department of Agriculture and Commerce and UMB Bank, Express Grain’s largest creditor.
The federal indictment notes that in September 2021, soon before filing for bankruptcy, Express Grain held about $31 million worth of grain it had obtained from farmers but for which it had not paid. The company simultaneously pledged that grain to creditors such as UMB Bank and sold it to third parties without the knowledge of the farmers or the bank, the indictment alleges.
Mississippi Attorney General Lynn Fitch’s office announced its investigation into Coleman in February, following a determination by the state Department of Agriculture that Express Grain had submitted falsified audit documents in pursuit of renewing its grain warehouse licenses. Those licenses were required by state law for Express Grain to store grain and deal grain.
Coleman is accused of submitting altered audit documents completed by Ridgeland-based accounting firm Horne LLP from 2018 through 2021, “thereby concealing significant financial instability and operating losses,” which impacted the Department of Agriculture’s decision to renew Express Grain’s licenses, according to the state indictment.
Coleman is also accused of submitting altered audit documents to the Mississippi Development Authority in obtaining a $750,000 grant. The MDA filed a complaint accusing Express Grain of this action in June.
The state indictment also accuses Coleman of false and fraudulent representation to Mississippi farmers to deliver and store their grain with Express Grain and failing to pay them an amount exceeding $50 million.
“My office will continue to prosecute this case to the fullest and to work with other state and federal agencies,” said Fitch in a statement, “including the U.S. Attorney’s Office of the Northern District of Mississippi, the U.S. Department of Agriculture Office of Inspector General, the Internal Revenue Service (IRS), the Federal Bureau of Investigation (FBI), and the Mississippi Department of Agriculture and Commerce, to ensure the best possible outcome for the individuals and taxpayers harmed by the underlying fraud in this case.”
The federal wire fraud charges include Coleman’s alleged misleading of farmers and the Department of Agriculture, but also include charges of defrauding UMB Bank.
The indictment points to an email Express Grain sent to potential customers stating it was financially stable, just a day before filing for bankruptcy. Coleman is accused of approving the following paragraph of the email:
“We are steadily crushing beans, and will start shipping trains of beans so we have ample space for everyone. I also wanted to let you know that we are in good shape financially. We have funding in place from multiple sources to make sure everyone gets paid on time. Stay safe out there and keep those combines rolling!”
Coleman is accused of misrepresenting the amount of grain sold to FC Stone Merchants LLC, grain that was pledged as collateral to UMB Bank. What was reported as sold was 100,000 bushels when the alleged true amount Express Grain sold was more than 2.7 million, a difference of approximately $30 million.
Coleman is also charged with submitting altered financial documents to UMB Bank as well, an accusation the bank levied against Coleman earlier this year.
Once one of Leflore County’s fastest-growing companies, Express Grain filed for bankruptcy in September 2021. Law enforcement agents raided its offices, as well as Coleman’s home, in February, just days before the auction in which Express Grain’s Leflore County properties were sold.
The company still exists but mostly on paper as attorneys and consultants attempt to have the company liquidated to close its affairs.
A long legal battle over Express Grain’s proceeds was settled earlier this year. Farmers who chose to sign on to the settlement were only able to claim a share of $9 million.
Coleman filed for bankruptcy on the same day as Express Grain. UMB Bank holds Coleman responsible for the more than $70 million in financing that Express Grain failed to pay back.
Albert Altro, a forensic accountant appointed by a federal judge to investigate Coleman’s finances, found no evidence of fraudulent activity in his report submitted last month.
- Contact Kevin Edwards at 662-581-7233 or kedwards@gwcommonwealth.com.
