PIERRE, S.D. (KELO) — State regulators are accusing a Gettysburg business of breaking some of South Dakota’s grain laws.
Banghart Properties LLC faces maximum civil fines totaling $70,000 for purchasing hundreds of truckloads more than the $5 million that a Class B license annually permits, as well as lifetime grain-licensing bans against its ownership and management team.
The state Public Utilities Commission oversees grain-trading in South Dakota. PUC staff attorney Amanda Reiss laid out the alleged violations to the commission in a Jan. 30, 2023, complaint.
Banghart Properties has 20 days to answer the summons. An attorney for the company hadn’t officially responded as of Friday night. The commission is waiting to decide how to proceed.
The commission has also been asked to seek criminal prosecution in the matter.
State records show a tangle of businesses.
Dustin and Sabrina Banghart of Huron started Banghart Properties on June 22, 2018. On May 16, 2019, Jan and Rick Banghart filed a statement of change, listing themselves as the beneficial owners of Banghart Properties. On Nov. 15, 2021, Jan Banghart filed an amendment, listing only herself as owner.
On June 22, 2018, Jan and Rick Banghart also opened a consulting business based at 126 Hilltop Drive, Gettysburg. Filings for 2019 and 2020 with the South Dakota Secretary of State showed Fearless Grain Marketing, of the same address, as a beneficial owner. The secretary of state dissolved Banghart Consulting on October 15, 2021, for failure to file an annual report.
Jeremey Frost of Onida opened Fearless Grain Marketing on May 3, 2017. Three years later, he opened Fearless Grain Marketing Storage & Arbitrage on Sept. 27, 2020.
Jan Banghart wrote a letter dated Feb. 12, 2021, to a person at the state commission explaining “our business model for FGM Storage & Arbitrage dba Banghart Properties.”
Frost terminated FGM Storage & Arbitrage effective June 30, 2021; it appears however he didn’t notify the secretary of state until Oct. 18, 2021. In a March 3, 2021, email that Jan Banghart wrote to PUC grain-warehouse manager Cody Chambliss, she identified Jeremey Frost as her son.
Frost agreed to a settlement with the commission on May 25, 2021, after he was discovered making grain purchases without a state license. The settlement called for a $20,000 penalty.
Frost also ran the Spring Creek concession for the state Game, Fish and Parks Department but didn’t re-apply in 2021. Spring Creek is located along the Missouri River between Pierre and Onida.
In the current matter, Reiss sent a cease-and-desist order to Banghart Properties regarding any grain-buying activities on Jan. 12, 2023.
South Dakota grain licenses expire annually on June 30. In a Jan. 27, 2023, affidavit, Chambliss detailed Banghart Properties’ licensing history and its alleged violations.
The allegations stated that Banghart Properties purchased 184 loads after March 16, 2022, when the $5 million maximum was reached on the 2022 license; and purchased 130 loads after October 25, 2022, when the $5 million maximum was reached on the 2023 license.
Chambliss also said in the affidavit he had determined that Banghart failed to make payment for at least eight transactions within 30 days of delivery as required by state law.
He closed the affidavit with this statement:
“Since first receiving an application for a grain buyer license from Banghart, the Commission Staff has spent a significant amount of time on Banghart, time that is extremely out of proportion with time spent on the other 207 companies with 371 locations, licensed in the state. Licensing, inspecting, and reviewing Banghart for compliance with state law to permit Banghart to operate as a grain buyer over the past two years has not been an easy task for staff. The numerous emails highlighted in the timeline are just a small portion of those exchanged with Banghart in that time and do not account for the time inspecting and reviewing documents obtained in inspections.
“Additionally, the inconsistencies submitted to staff by Banghart have made inspections even more difficult and staff has spent additional time investigating the accuracy of Banghart’s records and financial information, significantly reducing the time available to review other entities.”
