Banghart Properties LLC, Gettysburg, South Dakota, will face a disciplinary hearing on June 21 based on a January 30 complaint that the company far exceeded its $5 million purchase limit by holding a Class B license. The commission will also decide on Banghart's Class B license application at that time.
A document filed by South Dakota Public Utilities Commission (PUC) staff recommends a fine of $70,000 against Banghart Properties, with an additional penalty of $13,000 for violating the PUC staff's memorandum of adjustment.
Records show Banghart Properties is owned and/or managed by Janice Banghart, Rick Banghart and Jeremy Frost. Banghart’s son, Frost, is a trader with the company. Frost had several companies, Fearless Grain Marketing Storage & Arbitrage, Fearless Grain Marketing, and Fearless Grain, which are involved in separate legal dilemmas.
In January, the PUC issued a cease-and-desist order against Banghart Properties for trading grain at levels far exceeding its licensed limits. The PUC lawyer recommended at that time the commission impose $70,000 in fines, block executives from getting future licenses, and refer the case for criminal charges.
Since January, Banghart Properties has been accused of violating the cease-and-desist order by buying wheat from a North Dakota producer but taking delivery of the grain in South Dakota; had its request to upgrade to a Class A license denied during a May 9 PUC hearing; and has put in an application to have its Class B license renewed.
'Significant' violations of every grain buyer law or rule on the books
"These violations are significant," stated the PUC claim against Banghart Properties. "Ms. Banghart and Mr. Frost are repeated violators, which requires a significant penalty be imposed on Banghart."
Recommended penalties include:
- Licensing Year 2022, $1,000 per violation up to a maximum $20,000 penalty for the SDCL 49- 24 45-1 violation
- Licensing Year 2023, $5,000 per violation up to a maximum $50,000 penalty for the SDCL 49-45-1 violation
- Violation of staff’s January memorandum of adjustment, additional penalty of $13,000
The complaint noted the evidence shows repeated violations of other state laws and administrative rules, including failure to maintain records required by law, providing false or misleading information to the commission, and making at least one grain purchase without having any record of the purchase.
"These violations show Banghart either does not adequately understand state law or has an utter disregard for adhering to the law," read the complaint. "Looking through the code and administrative rules, it appears in its two years of operation, Banghart has violated almost every grain buyer law or rule on the books."
The PUC claim stated instead of taking responsibility for these violations or working toward future compliance with the law, Banghart instead "argued each allegation, made excuses, claimed the actions were justified, indicated they would repeat violations to make producers happy, and blamed others for Banghart’s actions while repeatedly lashing out at the PUC and PUC staff members publicly."
"These actions suggest Banghart’s violations were not just mistakes they are willing to correct in the future, but are more indicative of a disregard of state law, which would make it extremely difficult for staff to effectively regulate this company in the future," the claim said.
The PUC strongly recommended against issuing a license to Banghart Properties, but if a license were to be issued, it should be done with conditions.
