Release No.: 055-19
WASHINGTON, May 9, 2019 – As part of its commitment to ensuring fair and competitive markets for the livestock, meat and poultry industries, on May 7, 2019, the U.S. Department of Agriculture’s Agricultural Marketing Service (AMS) issued an administrative complaint against Hatch Auction Inc., doing business as Cow House and Raymond L. Hatch (Hatch Auction) of Fruitland, N.M., for alleged violations of the Packers and Stockyards (P&S) Act.
Hatch Auction has 20 days following receipt of the complaint to respond directly to the USDA Administrative Law Judge or be found in violation and subject to penalty.
An investigation by AMS revealed Hatch Auction failed to properly use and maintain its custodial account, endangering the faithful and prompt accounting of shippers’ proceeds and the payments due the owners or consignors of livestock. AMS’ investigation revealed custodial shortages of $12,708 on Dec. 31, 2014; $11,353 on Jan. 30, 2015; $61,660 on Feb. 28, 2018; and $74,518 on April 17, 2018. The shortages in Hatch Auction’s custodial account were due, in part, to failure to deposit into the custodial account an amount equal to the proceeds receivable from the sale of consigned livestock.
A custodial account is a trust account that is a separate bank account designated for shippers’ proceeds. Operating with custodial account shortages is a violation of the P&S Act and places livestock sellers at risk of not being paid timely or at all.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $28,061 per violation against any person after notice and opportunity for hearing on the record. If the allegations are admitted, or proven in an oral hearing, Hatch Auction may be ordered to cease and desist from violating the P&S Act and assessed a civil penalty.
The P&S Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries.
For further information about the Packers and Stockyards Act, contact Stuart Frank, Packers and Stockyards Division, at (515) 323-2586, or by email at stuart.frank@usda.gov.
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