Federal prosecutors have dropped a wire fraud conspiracy case against an Oregon farmer, instead accepting a guilty plea from his grass seed brokerage for a related criminal charge.

Last year, the U.S. Department of Justice accused farmer Greg McCarthy in Yamhill County of paying illegal kickbacks in return for getting paid inflated prices by a grass seed marketing firm.

That indictment has now been dismissed while McCarthy’s brokerage, Ground Zero Seeds International, has pleaded guilty to concealing a felony crime.

As part of the plea deal, Ground Zero Seeds must serve a year’s probation and pay a $40,000 fine.

The company must also pay $516,000 in restitution to the J.R. Simplot Co., a major agribusiness firm that was defrauded in a broader grass seed scheme.

The Ground Zero Seeds case marks the fourth guilty plea that federal prosecutors have secured in a conspiracy that centered on Chris Claypool, the former general manager of Jacklin Seed. He’s currently serving three years behind bars for wire fraud and money laundering.

According to federal prosecutors, Claypool bilked millions of dollars from Jacklin Seed’s corporate parent, J.R. Simplot Co., by inflating his travel expenses, earning false sales commissions and selling mislabeled grass seed.

Proseeds Marketing of Jefferson, Ore., admitted to assisting Claypool with certain transactions and agreed to pay $84,000 in restitution and fines last year.

Another employee at Jacklin Seed, Richard Dunham, pleaded guilty to helping Claypool substitute less expensive types of grass seed for blends of costlier varieties, according to court documents.

Dunham also admitted that he paid inflated prices for grass seed produced by Greg McCarthy, the farmer in Yamhill, in exchange for kickbacks.

He’s scheduled to be sentenced for two counts of wire fraud conspiracy this summer.

Federal prosecutors said that Dunham and McCarthy unsuccessfully tried to conceal the kickbacks by referring to them as “shoes” in emails.

For example, Dunham wrote that a payment of $480,000 for several tall fescue seed shipments was in the mail and asked, “Must mean I might be getting new shoes soon?”

To which McCarthy replied, “Yes, shoes should be coming soon,” and followed up by sending Dunham a check for more than $6,500, according to the indictment against the farmer.

The government’s initial indictment alleged that McCarthy overcharged Jacklin Seed by roughly $190,000 in 2019 and paid kickbacks to Dunham averaging 2 cents per pound.

A federal judge has now dismissed that original indictment against McCarthy at the request of the government, which filed a superseding indictment against his company, Ground Zero Seeds.

In the superseding indictment, federal prosecutors allege that Ground Zero Seeds bought “substantial quantities” of bluegrass seed from Jacklin Seed at a discounted rate.

The company obtained the discount by paying Dunham about $190,000 in kickbacks and then sold the grass seed at a profit of $516,000, according to the superseding indictment.

McCarthy admitted that Ground Zero Seed helped cheat Jacklin Seed by selling at inflated prices and paying discounted prices for grass seed, according to the company’s petition to plead guilty, which he signed as its representative.