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Former Jacklin Seed manager pleads guilty in Oregon to conspiracy to commit wire fraud

UPDATED: Wed., March 31, 2021

Chinese workers lay turf grown from Jacklin Seed’s Kentucky bluegrass seed in 2001. A former Jacklin general manager, Christopher Claypool, has pleaded guilty in a fraud scheme that involved a former employee in China who court records indicate helped funnel money into Hawaiian real estate to avoid detection by the Internal Revenue Service.  (Courtesy photo)
Chinese workers lay turf grown from Jacklin Seed’s Kentucky bluegrass seed in 2001. A former Jacklin general manager, Christopher Claypool, has pleaded guilty in a fraud scheme that involved a former employee in China who court records indicate helped funnel money into Hawaiian real estate to avoid detection by the Internal Revenue Service. (Courtesy photo)

A Spokane County man has pleaded guilty in Oregon federal court to participating in a wide-ranging fraud scheme while he was working for Jacklin Seed in Liberty Lake, a subsidiary of J.R. Simplot Co. until last year.

Christopher Claypool, 52, was indicted last month in U.S. District Court in Oregon on several counts, including wire fraud, alleging he was part of an elaborate scheme that included selling lower-grade seed for higher prices and pocketing the difference.

Court records indicate Claypool also was using his former position as general manager at Jacklin, a longtime local grass seed company, to use a local travel agency to create marked-up travel itineraries for which he later got kickbacks from the inflated fake invoices.

In addition to those schemes, Claypool admitted working with a Jacklin employee based in China to divert Jacklin funds through banks in Hong Kong and China to purchase property in Hawaii as a means to avoid detection by the Internal Revenue Service.

After the indictment was filed in February, Claypool agreed on March 15 to plead guilty to three counts of conspiracy to commit wire fraud and a single count of conspiracy to commit money laundering. Claypool’s attorney, Spokane-based Christian Phelps, said negotiations on the plea agreement started even before the case was filed against Claypool, who has no prior criminal record.

“Mr. Claypool just wanted to resolve everything,” Phelps said. “He’s taken extraordinary measures to resolve this case.”

Claypool is scheduled to be sentenced June 21 before U.S. District Court Judge Karin J. Immergut in Portland.

Each count could have brought a maximum of 20 years in prison. But in exchange for pleading guilty, prosecutors have agreed to seek no more than four years in federal prison.

As part of the agreement, Phelps said he’s allowed to argue for any sentence.

According to court records, the seed-pricing scheme started in 2015 and continued through 2019. Claypool and defendant Richard Dunham, of Oregon, agreed to start selling lower-grade grass seed that was fraudulently packaged as more expensive varieties.

“As a result of the unauthorized substitutions and false invoices … Simplot refunded buyers at least $1,108,401.44,” court records state. “This amount represents the defrauded purchasers’ combined losses from this scheme.”

Claypool admitted working with Buzz Baldwin, an independent travel agent in Spokane, starting in 2014 to submit inflated invoices to Simplot for Claypool’s business travel.

“The invoices Baldwin submitted as part of this scheme billed Simplot many times the actual cost of the airfare defendant used and sometimes billed for travel that defendant never undertook,” according to court records.

Baldwin overcharged Simplot more than $500,000 and then gave most of that money back to Claypool in the form of kickback payments, court records state.

Phelps, the attorney, said he is not aware of anyone other than Claypool facing charges related to the travel billing.

As part of the one of the counts, Claypool and a former Jacklin employee, Yao Zhongjun, who was based in China, allegedly had for eight years been part of a scheme that diverted Jacklin “rebates or commissions” that Claypool had approved.

That scam netted Claypool and others more than $12 million, according to court records.

In order to conceal the scheme and its proceeds from their employer and the IRS, Claypool and Yao wired the money from banks in Hong Kong and China to purchase property in Hawaii for Claypool’s benefit.

“Between September 2016 and April 2019, (Claypool) sold the first three of these properties for a combined total of $10,175,000,” court records state.

In addition to a potential prison term, Phelps said Claypool has agreed to pay about $8.3 million in restitution to Simplot.

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