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URGENT: Mississippi Department of Agriculture VOIDS Express Grain warehouse licenses due to fraud

Thursday, February 10, 2022, 5:53 pm News Flash Archive

The Mississippi Department of Agriculture and Commerce ("MDAC") today voided the warehouse licenses of Express Grain after finding that they were obtained by fraud. The opinion, issued by Commissioner Andy Gipson, may be read here: Order voiding Express Grain licenses

MDAC first became aware of this matter in mid December, and a hearing was finally held on February 3, 2022. See our coverage of this matter here:

Mississippi Department of Agriculture investigating Express Grain for false filings

Express Grain docs show apparent cover up of huge loss in 2020

Commissioner Gipson outlines Mississippi law, and details the ways in which Express Grain submitted an altered copy of the actual audit prepared by Horne LLP, EG's auditing firm. These differences have been described more fully in our prior reporting.

Gipson found specifically:

I find that Express Grain made material alterations to the Correct Horne Report and submitted the False Horne Report to the Department for the purpose of fraudulently obtaining grain warehouse licenses and grain dealer authority under false pretenses.

I find based on the testimony of Gene Robertson, Director of the Department's Grain Division, that if Department officials had known that the False Horne Report had been forged, or had they known that fraud had been perpetrated by Express Grain, the Department would not have issued the Licenses to Express Grain.

I find further based on the testimony of Gene Robertson that if the Correct Horne Report and related combined financial statements for the years ended June 30, 2020 and 2019 had been filed with the Department, including the Emphasis of Matter Regarding Going Concern contained in the Correct Horne Report, the Department would not have issued the Licenses to Express Grain.

Incredibly, MDAC also discovered that the same falsification of audit reports had taken place in 2019 and 2020.

Gipson concluded:

...this scheme of altered financial statements and audit reports appears to have been part of an ongoing fraud regarding Express Grain's filings with the Department since at least 2019.

The consequence of this fraud is dire:

I do hereby find that Express Grain's alteration of the Correct Horne Report and the submission of the False Horne Report to the Department were in violation of Miss. Code Ann. Section 75-44-11, 75-44-43(2) and the above-described statutes and regulations, and that said Licenses were fraudulently applied for and obtained.

Fraud vitiates everything it touches. This is a well-founded, long-recognized principle under Mississippi law.... Where a license or authority is sought and obtained on the basis of fraud and in violation of statutory law, the license or authority is not merely "voidable," but is void ab initio.

Therefore, the Commissioner determined that:

... I find that the Licenses issued to Express Grain were and are the product of fraud, and because Mississippi law deems these Licenses void, I find the Licenses were never lawfully issued to Express Grain.

IT IS, THEREFORE, ORDERED AND ADJUDGED that the above-described Licenses and grain dealer authority issued by the Department to Express Grain Terminals, LLC were obtained on the basis of fraud and are hereby revoked ab initio and are determined and deemed to be null and void ab initio and without legal effect since July 1, 2021....

What happens next is anybody's guess.

John Pittman Hey
The Taxpayers Channel

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