WASHINGTON, Dec. 10, 2020 – The U.S. Department of Agriculture (USDA) issued a complaint against M&L Farms, LLC (M&L Farms), Jallaq Farms, LLC (Jallaq Farms) and Othman Jallaq (Mr. Jallaq), all of Grove City, Ohio, on Nov. 12, 2020, for alleged violations of the Packers and Stockyards (P&S) Act.
An investigation by USDA’s Agricultural Marketing Service (AMS) revealed that between Dec. 31, 2017, and Jan. 31, 2018, M&L Farms, under the direction, management, and control of Mr. Jallaq, was operating while insolvent. As of Dec. 31, 2017, M&L Farms’ current liabilities exceeded its current assets by $238,747, and as of Jan. 31, 2018, M&L Farms’ current liabilities exceeded its current assets by $223,000. Also, M&L Farms and Mr. Jallaq failed to keep and maintain records sufficient to fully and correctly disclose all transactions involved in their business.
The investigation revealed that from Jan. 25, 2017, to March 29, 2018, M&L Farms and Mr. Jallaq purchased approximately $993,568 of livestock, and failed to pay, when due, the full purchase price. During the same time period, the bank returned nine checks unpaid because M&L Farms and Mr. Jallaq failed to maintain sufficient funds in the account to pay the checks when presented. From May 16, 2018, to Oct. 17, 2018, M&L Farms and Mr. Jallaq purchased approximately $75,017 of livestock, and failed to pay, when due, the full purchase price.
The investigation further revealed that from May 29 2019, to Aug. 26, 2020, a related company, Jallaq Farms, and Mr. Jallaq purchased approximately $351,104 of livestock and failed to pay, when due, the full purchase price. As of Aug. 27, 2020, M&L Farms, LLC, Jallaq Farms, and Mr. Jallaq still owe a combined total of approximately $459,038 to one seller for livestock purchases.
The P&S Act requires subject entities to issue the full payment for livestock by the close of the first business day following purchase and transfer of possession. Failure to timely pay for livestock and failure to pay for livestock purchases are both unfair trade practices and violations of the P&S Act.
The P&S Act authorizes the Secretary of Agriculture to assess civil penalties up to $29,270 per violation against any person after notice and opportunity for hearing on the record. If the allegations are admitted or proven in an oral hearing, M&L Farms, Jallaq Farms, and Mr. Jallaq may be ordered to cease and desist from continuing violations of the P&S Act and jointly assessed a civil penalty.
The P&S Act is a fair trade practice and payment protection law that promotes fair and competitive marketing environments for the livestock, meat and poultry industries.
For further information about the Packers and Stockyards Act, contact Jeana Harbison, Packers and Stockyards Division, at (202) 720-7051, or by email at Jeana.M.Harbison@usda.gov.
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