VA Man Cops to Scam Against Supervalu, Kellogg's

A former team sales manager at the Kellogg Co. has pleaded guilty to conspiracy to commit wire fraud against the cereal giant and grocery wholesaler Supervalu Inc.

John Morrell Palmer III, 55, of Fredricksburg, Va., faces up to 20 years in prison when sentenced Oct. 2 for his role in the scam, the Richmond Times-Dispatch reported. Authorities said Palmer admitted to conspiring with an unindicted, unnamed president of an unidentified grocery retailer that operates stores in the Richmond area and elsewhere in Virginia. The pair submitted fraudulent documents to Battle Creek, Mich-based Kellogg's and Minneapolis-based Supervalu that resulted in $1.9 million in deductions against the retailer's running account with Supervalu between 2009 and 2013, the Times-Dispatch reported. The unindicted co-conspirator would then give Palmer roughly half of the value of the deductions in cash payments handed over in the parking lots of the retailer's stores.

Palmer agreed to cooperate with the investigation of the unindicted co-conspirator, which involved submitting another fraudulent deal sheet, with Kellogg's knowledge, that triggered a $59,000 deduction for the retailer’s account, the T-D reported. Palmer met the co-conspirator Aug. 5 at a store in Henrico, Va., where, while monitored and recorded by investigators, Palmer was given $24,650 in cash, according to local press reports.

Palmer told authorities he used the money he received to assist various youth sporting organizations, the T-D reported.