Got milk?

A court fight over watered-down milk raises accusations of misconduct by federal prosecutors

Late in the morning after he has already put in what would be to most people a full day of chores, Larry Don Keith, a farmer from Como in East Texas, can sound downright philosophical about his predicament.

"They're looking for someone to blame," says the 48-year-old third-generation dairy farmer. "And I fit the profile."

But most of the time, Keith expresses bitterness about the federal prosecutors in Fort Worth who last July persuaded a grand jury to indict him and 28 other farmers and truckers on charges that they conspired to dilute milk below regulatory standards to make an illegal profit.

Keith has operated his own farm, now with 136 acres and 80 cows, for two decades. He insists that he is innocent of the charges, which could result in as much as five years in prison.

But Keith will face a tough battle at his trial, which is scheduled to start in January. That's because the vast majority of farmers and truckers accused in the case--24 of the 29--have entered guilty pleas and promised to cooperate with the prosecutors in exchange for possible lenient sentences. Keith stands with one other dairy farmer and three truckers as the only defendants still fighting the charges.

"There is no doubt in my mind," says Keith, "that some of these people are guilty."

But he does not believe that all of those who have pleaded guilty did wrong. Instead, he believes many of the farmers have responded fearfully to what he perceived as overzealous pressure from investigators and prosecutors. Keith, whose lawyer recently filed charges of prosecutorial misconduct in the case, says about the federal investigators, "They were trying to trick me with lies, and they were not even intelligent lies."

On the day federal agents came to arrest him, Keith recalls, the government's tactics startled his whole family.

"They show up at 7 in the morning beating the door down," Keith recalls. The dairy farmer had already left for his chores on the farm. But his wife, 46-year-old Sue Keith, remained inside the house. "'We're going to have to search the house for your husband,'" Keith says the investigators told his wife when she informed them he was on the farm. She would not let them in, but Keith says the men stayed around the farm until she left and persuaded his teenage son to let them search the house.

"They scared death," says Keith.
Keith says that the prosecutors may have found a shortage of milk product in the samples they tested (or samples with high water or high salt content) but that often such variations just represent seasonal changes typical with the cows. "It always goes up and down," says Keith about the milk content.

David Jarvis, the assistant U.S. attorney in Fort Worth, led the prosecution of the case. "I am not going to respond to claims that this was seasonal in the press," says Jarvis, "but I will deal with that in front of a jury."

In court filings, the government lawyers have accused the farmers and truckers of engaging in 11 different conspiracies. As the milk-production system in the North Texas area normally works, truckers driving large tankers may stop by several farms to collect milk. The milk is brought to the regional office of The Associated Milk Products, an agricultural marketing cooperative of dairy farmers, which is located in Arlington and distributes the milk. On their routes, the truckers pour milk from each dairy farm into the same tanker. But at each farm, state and federal law requires the truckers to take two samples of that farmer's milk. One is sent to a state regulatory agency, and one is kept at the cooperative. The dairy farmers are paid by the cooperative according to the weight of their milk.

The prosecutors claim that during a period from 1991 to 1994 dairy farmers in northeast Texas and truckers on those routes conspired to increase the bulk of the milk production. Usually, the truckers and farmers added salt or water to the milk--both of which increase weight--after the samples were taken, prosecutors allege.

The government has lined up truckers who have signed statements that they received cash payments from farmers for agreeing to water down the milk. The truckers have stated that they often took water from the farmers' own wells and put it directly in the tanks.

As a result of increasing the weight of their milk loads, prosecutors contend, the farmers received tens of thousands more dollars from the cooperative.

It was not always one side that initiated the scheme, according to prosecutors. "Sometimes truckers approached the dairy farmers, and sometimes farmers approached the truckers," says Jarvis.

Although he will not "elaborate on anything in further detail than what was available in public court documents," Jarvis does say that he plans to present to the jury lab experts who found some evidence of dilution in the samples. He also plans to put on the witness stand the more than dozen truckers and farmers who have pleaded guilty to participating in the scheme.

"That is just purchased testimony," says Keith about his fellow farmers and the truckers testifying against him and the other defendants. It's true that the witnesses will possibly get lighter sentences as a result of cooperating with the government's case. "It depends on when they came and how cooperative they are," says prosecutor Jarvis. (In an unrelated case that could affect such deals nationwide, a federal appeals court in Denver is weighing whether prosecutors who offer leniency in exchange for testimony violate bribery laws.)

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