ANCHORAGE, Alaska — A former executive of a defunct Alaska creamery has been convicted of making false statements to the U.S. Department of Agriculture to cover up a business partner's fraud.
Karin Olson of Wasilla was found guilty by a federal jury Wednesday of two felony counts, both involving federally backed state loans for Valley Dairy Inc. in Palmer.
Olson, 68, remains free on bail until her Oct. 24 sentencing, the Alaska Dispatch News (http://is.gd/rU0jq1) reported. Olson faces more than 30 years in prison and fines totaling more than $1 million, prosecutors said.
Olson was accused of submitting false statements to the USDA's Rural Development Program. Olson also failed to alert the government that she knew her business partner, Kyle Beus, was diverting federal grant money from the dairy to a failing restaurant, according to prosecutors.
Neither Olson nor her attorney could immediately be reached for comment Friday.
Beus pleaded guilty last year to charges associated with misusing federal grants. The grant money was intended to save Alaska's dairy industry.
Beus was the manager in charge of day-to-day operations of Valley Dairy. When he drained the operation of its federal grants in 2008, however, he put others at financial risk, prosecutor said. Milk producers were owed $200,000, and construction vendors were due more than $450,000, prosecutors said.
Olson stepped in as chief financial officer. Beus was removed from authority over bank accounts, but he remained as president of the dairy, according to prosecutors, who said Olson failed to alert law enforcement or the USDA of Beus' fraud. Olson successfully induced the USDA, instead, to support a state loan for the dairy, even though information she provided about the business was false, prosecutor said.
The state loan kept the operation afloat for a time. But the business finally closed in 2012.
Olson was the state executive director of the USDA's Farm Service Agency between 1993 and 2001.
Information from: Alaska Dispatch News, http://www.adn.com