Release No.: 006-20
WASHINGTON, Jan. 28, 2020 – As part of its commitment to ensuring fair and competitive markets for the livestock, meat and poultry industries, on Dec. 17, 2019, the U.S. Department of Agriculture’s (USDA) Agricultural Marketing Service (AMS) issued an administrative complaint against Colby Livestock Auction, LLC (Colby) and Leland R. Wilson (Wilson) of Colby, Kan., for alleged violations of the Packers and Stockyards (P&S) Act.
An investigation by AMS revealed that Colby and its owner/manager Wilson failed to properly use and maintain its custodial account. AMS’ investigation revealed custodial shortages of $75,955 on Aug. 24, 2016, and $10,919 on Sept. 29, 2016. The shortages in Colby’s custodial account were due, in part, to failure to deposit into the custodial account an amount equal to the proceeds received from the sale of consigned livestock as prescribed by the regulations.
A custodial account is a trust account designated for shippers’ proceeds from the sale of livestock in trust for consignors. Operating with custodial account shortages and custodial account misuse are violations 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 $11,000 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 Colby and Wilson 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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