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Kellogg’s rep pleads guilty to defrauding Supervalu

A former Kellogg’s sales manager has pled guilty to a scheme by which he defrauded his employer and supplier Supervalu by filing phony deal sheets on behalf of a conspiring grocery retailer.

Jon Springer, Executive Editor

July 8, 2014

2 Min Read
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CORRECTION: An earlier version of this story inaccurately inferred the retailer under investigation. SN regrets the error.

A former Kellogg’s sales manager has pled guilty to a scheme by which he defrauded his employer and supplier Supervalu by filing phony deal sheets on behalf of a conspiring grocery retailer.

The salesman, John Morrell Palmer III, faces up to 20 years in prison for the scam, which resulted in the retailer receiving nearly $1.9 million in reimbursements for transactions that never took place between 2009 and 2013. The grocery retailer, which federal lawmakers did not disclose, operates grocery stores around Richmond and elsewhere in Virginia. Authorities said Palmer’s unindicted co-conspirator was the president of the retailer.

Palmer told investigators that his co-conspirator proposed the scheme to split proceeds from deductions for transactions that did not take place, and afterward arranged meetings in parking lots of the retailer’s stores to pay Palmer in cash. Palmer subsequently agreed to cooperate with authorities investigating the retailer and on Aug. 5 last year arranged an exchange between his co-conspirator at a grocery store parking lot while being monitored by law enforcement officers.

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Palmer, a team sales manager for Kellogg’s based in Virginia, told authorities he had previously participated in a diversion scheme with his co-conspirator that paid him between $100,000 and $200,000 over three years. Palmer said he knew taking the funds was improper but had done it to raise funds to support area youth sports teams and generate goodwill for Kellogg’s.

Palmer pled guilty to a single count of conspiracy to commit wire fraud, and has agreed to cooperate with authorities further investigating the incidents. A Supervalu spokesman said the company was cooperating fully in the investigation.

 

 

About the Author

Jon Springer

Executive Editor

Jon Springer is executive editor of Winsight Grocery Business with responsibility for leading its digital news team. Jon has more than 20 years of experience covering consumer business and retail in New York, including more than 14 years at the Retail/Financial desk at Supermarket News. His previous experience includes covering consumer markets for KPMG’s Insiders; the U.S. beverage industry for Beverage Spectrum; and he was a Senior Editor covering commercial real estate and retail for the International Council of Shopping Centers. Jon began his career as a sports reporter and features editor for the Cecil Whig, a daily newspaper in Elkton, Md. Jon is also the author of two books on baseball. He has a Bachelor of Arts degree in English-Journalism from the University of Delaware. He lives in Brooklyn, N.Y. with his family.

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