Scott David Grinstead, the former chief executive officer of Adams Produce Co. in Birmingham, AL, was sentenced to 16 months in prison Oct. 29, which was significantly less than sentencing guidelines.
Birmingham attorney William Athanas told The Produce News Oct. 30 that as part of the proposal in which the former CEO pleaded guilty to fraud and other charges, Grinstead paid almost double restitution to the estate of Adams Produce during the bankruptcy proceedings for that company.
He said it was estimated that Grinstead profited to the tune of $250,000, "but in our plea proposal, which was accepted by the court, we proposed a restitution amount of $450,000."
That sum was paid in April and was earmarked for the firm's employees, according to Athanas. He added that U.S. District Court Judge Karon O. Bowdre took that and other factors into account when she sentenced Grinstead to the 16-month term.
Athanas said sentencing guidelines call for jail time of between 33 and 41 months, but the judge is empowered to alter that sentence for extenuating circumstances. He said the judge noted Grinstead's proactive rehabilitation efforts and his restitution payment.
"The imposition of this sentence marks the end of a very difficult chapter in Scott's life, but also stands as an opportunity for a new beginning," Athanas stated. "The court's sentence reflects what a mountain of evidence demonstrated -- that he has undergone a fundamental transformation and has backed up his commitment to change his life with action."
In his 50-page sentencing memorandum filed with the court in October, Athanas had argued for a lighter sentence, including the possibility of serving that sentence under house arrest. He revealed that Grinstead had a history of alcohol and drug abuse, but had gone through an inpatient treatment program and has remained sober for more than a year-and-a-half. Additionally, Grinstead continues in a recovery program at his church.
In his memorandum, Athanas argued: "Simply put, the person who stands before the Court to be sentenced is not the same individual who committed the offenses of conviction."
The judge obviously took Grinstead's action into account but still imposed a prison sentence rather than house arrest.
While the Adams case continues with potential prosecutions against other company officials, Athanas said this marks the end of Grinstead's case.
Grinstead pleaded guilty earlier this year to fraud against Adams Produce, failure to report a felony against the government and failure to file federal income tax returns.
Adams Produce, which was founded more than a century ago, filed for bankruptcy last year. As the company was going through financial problems, several employees have been accused and convicted of resorting to fraud with regard to overpayments by various public entities for fruits and vegetables sold to military bases and schools.
According to court records, certain Adams employees, in the wake of the company's financial problems, resorted to fraud involving contracts the company had with the U.S. government to provide fruit and vegetables for military bases and schools.
Grinstead was not accused of initiating the fraud against the government, but rather for allowing it to continue and ending slowly once he discovered it.
With regard to Grinstead using company funds for his own benefit, in his sentencing memo Athanas painted a picture of an executive who consistently blurred the lines between his own assets and liabilities and those of the company.
While Athanas admits that those actions were not justified, he said the money flowed both ways, with Grinstead sometimes using his own money to pay company debts and sometimes using company money to pay his debts.
With regard to the failure to file tax returns, Athanas said Grinstead did not file returns for five years in a row, including three years in which he was due a refund. Again the attorney argued that while this does not excuse the crime, it paints a clearer picture of the mindset of the perpetrator.