IOWA CITY, Iowa (AP) — A former manager for an influential Iowa-based pork dealer has died in a crash, days after federal prosecutors charged him in a scheme to swindle hog farmers through fraudulent buying practices.
Steven Demaray, 70, the former regional buying manager for Lynch Livestock, was driving a truck that crashed head-on Monday morning into a concrete overpass support pier on Highway 63 near New Hampton, where he lived, according to the Iowa State Patrol.
Demaray, who was known by his nickname “Shooter,” was the only person in the vehicle and died at a hospital. An accident report released Tuesday gave no indication why the truck left the road and entered the median before the crash, but said the conditions were dry.
As part of an investigation by the U.S. Attorney's office in Cedar Rapids, a federal grand jury on Nov. 4 indicted Demaray and former Lynch Livestock bookkeeper Billie Joe Wickham on two counts of mail fraud.
Demaray pleaded not guilty during his initial court appearance Nov. 10 and was free on bond.
Lynch Livestock, a licensed livestock dealer, operates buying stations in Iowa and several other states where hog farmers and producers sell their animals. The company, which is owned by major Republican donor and philanthropist Gary Lynch, then supplies hogs to processing plants for major pork brands around the country.
Lynch sent a note to employees Monday saying he had a “sad heart” to share the news of Demaray’s death. “Our thoughts and prayers are with the family as they make it through this difficult time,” he wrote.
The indictment alleged that, in 2016 and 2017, Demaray and Wickham systematically cheated farmers who sold swine to Lynch Livestock buying stations. Both worked at the company's headquarters in Waucoma, Iowa.
When Demaray would get a fax from a buying station manager detailing a purchase, he would arbitrarily lower the weights and quality classifications of the animals, reducing their cost by thousands of dollars, the indictment alleged. Wickham would then allegedly use a manual scale at the headquarters to create fraudulent scale tickets with the lower weights and classifications. Lynch Livestock would then pay the farmers far less than what the company really owed.
Demaray and Wickham made “false and misleading statements” to regulators with the U.S. Department of Agriculture to conceal the fraud and to assure livestock sellers their practices were fair, while destroying documents with the real weights, the indictment says.
In October 2017, the USDA fined Lynch Livestock $15,000, ordered the company to pay restitution to two major hog producers and demanded those practices be stopped.
Lynch Livestock promised then to adopt digital-only scales, replace its software to ensure animal weights were properly recorded and take other corrective action. Demaray left the company in 2017. Wickham, who is expected to make his initial court appearance next week, moved to a different position.
But a USDA investigation found similar practices continued from January 2018 through December 2020.
In July, the USDA ordered Lynch Livestock to pay a civil penalty of $445,626, including restitution to affected sellers. Lynch Livestock said that it had fired employees responsible for the latest violations and announced pork industry veteran Dan Sutherland would be its new CEO, but a federal grand jury soon began hearing testimony about the fraud.
Sutherland said in a statement last week that the company was “extremely disappointed” that federal prosecutors had moved forward with criminal charges. He said the company had worked with USDA regulators and made “proper restitutions, paid fines and implemented appropriate internal changes.”