PIERRE, S.D. (KELO) — The South Dakota Public Utilities Commission accepted a settlement Tuesday in which Jeremey Frost and Fearless Grain Marketing agreed to pay a $20,000 penalty and meet other conditions for buying grain without a state-required license.
Commissioner Gary Hanson questioned why the Onida man continued to buy grain from producers after PUC staff warned that he needed a license.
“It wasn’t done necessarily on purpose. It was one big contract,” Frost said. He added, “We had a large contract that an employee for me did. It took longer than I realized.”
Hanson told Frost he would have considered accepting a smaller amount of penalty but Frost kept making purchases.
Replied Frost, “I didn’t make any new purchases, sir. It was the same contract.”
His lawyer, Rob Konrad, said another company had litigation pending against Fearless Grain Marketing. “Mr. Frost does have reasons for doing some of the things he did,” Konrad explained, saying it was “kind of a hectic time.” “He had been working with Indigo. They pulled out of several contracts.”
Frost, asked whether he intends to get a state license, said, “Yes sir, I am.”
The complaint against Frost and his company relied on reports compiled by the PUC’s grain warehouse staff.
Commission chairman Chris Nelson asked about details of the outstanding contracts that need to be filled. Cody Chambliss, the commission’s grain chief, said there were less than 10 and those will be done in June.
Nelson asked whether the contracts were valid, given that they were made by an unlicensed buyer. PUC staff attorney Amanda Reiss said that’s a separate civil matter but didn’t see anything in state law that would invalidate a contract because the buyer wasn’t licensed.
Konrad said he thought the contracts were legal: “No request to get out of a contract has been made.” Konrad said Frost intends to fulfill them and has the financial and business wherewithal to see them through.
Chairman Nelson thanked Frost and Konrad for working “diligently” with the commission staff to reach the settlement. Said Nelson, “That was certainly the right thing to do.”
The $20,000 equaled the maximum fine allowed under state law for buying grain without a license.
Nelson made two points for buyers and producers. He said it wasn’t the first unlicensed buyer docket that the commission had handled and said it “greatly puzzled” him why people wouldn’t check into what state laws required to be a grain buyer in South Dakota.
Nelson also directed a comment to producers. He said they need to do business with licensed buyers if they want financial protection under state law.