Former dairy owner receives 30-day sentence

ANCHORAGE — Former co-owner of the now-defunct Mat-Su Creamery Karen Olson says she will appeal the 30 days in jail and three years of supervised release a federal judge sentenced her to Tuesday.

A jury found Olson guilty July 30, 2014, of two of three counts — one count of concealing a felony and another count of making false statements to the U.S. Department of Agriculture — for which she was eventually tried. Prosecutors dismissed three of the six counts — those pertaining to wire fraud — listed in the original indictment before trial. The jury also acquitted Olson of a single count of mail fraud.

“Supervised release” differs from federal probation in that federal probation is imposed in place of jail time, whereas supervised release is imposed as a continuation of the sentence. The sentence was given as 30 days for each count, but those days will be served concurrently, resulting in an effective sentence length of 30 days.

Olson also faces a third-party notification condition to ensure she doesn’t become involved with additional businesses, as well as $2,000 in fines.

Olson’s case is the last stemming from the collapse of the Valley Dairy Inc. — doing business as the Matanuska Creamery — established after the earlier collapse of the Anchorage-based Matanuska Maid dairy. For a brief period prior to its 2013 collapse, the creamery was the only place local dairy farmers could take their milk for processing, according to Frontiersman articles on the subject. Shortly after Beus was removed, Olson took over, and sought loans from the USDA to keep the business afloat, some of which contained information concealing Beus’s felonies.

Beus was convicted of wire fraud and sentenced to two months in prison for his role in the creamery, which entailed inflating invoices in order to obtain more discretionary funds.

All but $9,000 obtained via grants was repaid, officials have said.

Assistant U.S. Attorney Retta-Rae Randall sought a penalty for Olson equal to Beus’ penalty, based in part on the fact that where Beus was “incompetent,” Olson ought to have known better.

“In terms of conduct, I think Mrs. Olson was really more egregious, because she knew all the rules,” Randall said. “She was a previous USDA employee. She made loans. She ran the show. She knew the planners in the Valley. She knew the dairy industry.”

Olson was the creamery’s kingpin, Randall said.

“I think she’s cunning, I think she’s manipulative, I think she knew exactly what she was doing, but there was this greater good that was part of the goal, as long as she had a piece of the pie,” she said.

In addition, Olson, who repeated claims of her innocence shortly before the sentence was handed down, has never admitted wrongdoing, Randall said.

“She (Olson) got on the stand and testified for several hours, and her story would change just every little bit as she’s testifying,” Randall said. “Enough to charge her with perjury? No. Self-serving? Yes.”

Defense attorney Steven Wells argued that Olson’s sentence ought to be reduced to as little time as possible, arguing at one point for as little as a single day in prison before being released. If Olson was guilty of anything, it was of excessive concern for the local dairy industry, Wells said.

“I think what this case really comes down to is what I have seen living in this state and that is what I call Alaska Pragmatism,” he said. “There is a real sense that because we are separated so far from the rest of the country, that it’s all on you, and you do what you need to do to get it done.”

“Are we going to send a 70-year-old woman who’s got no criminal history, to jail as a message to other people?” he said.

Circumstances had already conspired to penalize Olson sufficiently to ensure she would never become involved in a similar scheme, Wells said.

She already has suffered a lot because of the conviction, having her name brought forward like this,” he said. “What’s 60 days going to do?

“This isn’t a case in which you’ve got her counseling a drug dealer in which the instance that he gets out you know he’s going to go back and start dealing drugs,” he said.

That last remark drew a rebuke from presiding judge Tim Burgess, who largely sided with the prosecution.

“My experience actually hasn’t been that,” he said. “My experience is: a lot of people who get involved in drug crimes, frankly, know what they did and they own up to it. But it’s these white-collar cases where you have people (who) otherwise lead exemplary lives and then get caught and then say ‘I’m just a good citizen and I shouldn’t be in this situation.’ I think the evidence in this case belies that.”

“The level of deceit in this case is frankly a little breathtaking,” he said, before administering the sentence.

Olson blamed political enemies in the erstwhile Palin Administration for her woes, saying the administration had already decided against the creamery and in favor of reconstituting Matanuska Maid before she took over.

“I want to address the point that I have not taken responsibility,” she said. “That is not true. I have taken responsibility for everything I have done for the dairy industry.”

Olson also said she had reported Beus’s wrongdoing to the USDA immediately upon discovering it, and that the amount of federal funds spent on the investigation and in prosecuting the case far outweighed the missing $9,000. The prosecution also had terrible repercussions for local farmers, Olson said.

“Even if you take their amount, I think it cost them more than $9,000 to come and get my records,” she said.

Wells and Olson both said they intended an appeal, and they felt that the essence of Olson’s defense had become lost amid the case’s administrative details. Any appeal would be filed with the U.S. 9th Circuit Court of Appeals in San Francisco, Wells said. Olson will remain free pending Burgess’ ruling on Wells’ motion.

Contact Brian O’Connor at 352-2269 or brian.oconnor@frontiersman.com