Digging Up Dirt On Worm Deal Red Wiggler Farmers Lose Investments In Composting Venture That May Have Been Fraud
May 7, 2003
By JOHN JURGENSEN, Courant Staff Writer
Like most worm farms, Don Concascia's started small.
Out in the garage, a silent army of red wigglers in 20 wooden bins chewed through much of what his family threw out. Newspapers, food scraps and fruit peels went in and came out as castings, a rich natural fertilizer. He planned to sell the plant food he didn't use. If that went well, maybe he'd put up a building for his worms. Grow into it.
Then Concascia met a down-to-earth entrepreneur with an impressive proposal. Greg Bradley owned B&B Worm Farms, an Oklahoma company apparently leading the lucrative charge into organic waste management. In return for an initial investment of $10,000 to $100,000, Bradley would buy all the worms a grower could deliver and put them to work transforming the nation's garbage and manure into safe, powerful fertilizer.
Now, eight months after that meeting, Bradley is dead; his bankrupt B&B is being investigated for fraud; and Concascia is one of more than 2,000 worm farmers across the country left in the dirt.
"There was a big, bright light that came along and, unfortunately, we bit," said Concascia, of Montville. "We took the bait."
He took it, in part, because he already believed in Bradley's vision for vermiculture, as worm-powered composting is called. A science teacher at Waterford's Clark Lane Middle School, Concascia, 37, showed his students how worms could eat twice their weight in cafeteria scraps each week. On the 20 acres he shares with his wife and three young boys in Montville's Oakdale section, he saw his tomato plants flourish without Miracle-Gro or pesticides.
So the newspaper notice "New England needs worm growers!" seemed to validate the green crusade he had already begun.
Last September, Bradley made his pitch in the old mill in East Killingly where Concascia would soon expand his operation more than tenfold. Over crab and roast beef sandwiches, Bradley, a short man with a goatee, addressed a packed room.
Bradley said investors would receive a shipment of "breeder" worms, growing instructions and a harvesting machine. After the crops multiplied, B&B would buy back worms each month for up to $9 per pound. From its base in Meeker, Okla., the company would distribute those worms to operators worldwide, including Sierra Leone, Bradley said.
In similar meetings around the country, Bradley turned the ambitious curiosity of more than 2,400 people into binding contracts that included the false security of a one-year money-back guarantee.
B&B was "extremely successful at getting people to buy contracts, but very unsuccessful at finding people to use the worms or castings," said David Rhoades, a business rehabilitator and fraud examiner with Turnaround Professionals in Oklahoma City. Rhoades said he is looking for the approximately $30 million that B&B took in between 1998 and its April 22 bankruptcy filing, which included a 190-page list of creditors.
Bradley's recruiting worked because, on the surface, his enterprise had taken off.
"For a period of four years, people were getting paid," said Heidi Grohocki, who also farms worms at the East Killingly mill. She and her husband, Matt, both 26, functioned as B&B distributors, middlemen to 20 other growers around New England, including Concascia and a smaller operation in the Gales Ferry section of Ledyard.
"We scouted B&B," Concascia said. "We went to the Better Business Bureau. We talked to 18 growers around the country and these people were making money - up to $100,000 a year."
According to the Oklahoma Department of Securities, which filed a $14 million lawsuit against B&B a week before the company filed for bankruptcy, those paychecks were coming from the sale of new contracts. Almost all of the worms that growers sent in were being recycled as start-up packages for new growers.
Money from this apparent Ponzi scheme (a seeming reprise of worm cons in the 1970s) was also being funneled out to a tangled network of Bradley family members and friends, the securities department alleges. Recipients included an adult entertainment business in Las Vegas and an African gold mine.
"I can't tell you if there was really a gold mine in Africa. My cynical nature is to say no," Rhoades said.
At least three other states besides Oklahoma have taken legal action. The office of Connecticut Attorney General Richard Blumenthal is looking for answers, too.
In January, B&B's facade began to dissolve when Bradley died at age 40 of complications from pneumonia. His wife, Lynn Bradley, took over. She couldn't be reached for comment, but Rhoades said he has communicated with her.
Soon, B&B stopped accepting worm shipments - not to mention mailing paychecks. Though B&B recruited a new grower as recently as April 1, there were few, if any, people buying the worms - a species not to be confused with longer, thicker night crawlers often used for bait - for their intended purpose.
"Greg made it sound like he had contracts with large waste-management companies. But on his part there was a frightening level of ignorance of the field," said Kelly Slocum, a well-known figure in vermiculture. Slocum wrote the B&B manual and was on the board of directors until she resigned last fall.
B&B's collapse has pitched the worm industry into turmoil. Growers scrambling for buyers and answers converge in the online forum hosted by the Worm Digest newsletter to trade theories about Lynn Bradley's whereabouts and the extent to which a species spread by B&B is plaguing worm beds.
"There are people who are really hurting out there, regular people who mortgaged their homes and farms and will very possibly lose them because this thing didn't work," Rhoades said.
Concascia bought in with an equity loan on his home. For the Grohockis, the investment was $30,000.
"We put everything into this business and have nothing to show for it. We either sell it or dump the worms in the woods," said Heidi Grohocki, who is hopeful about negotiations with a composter in Massachusetts.
In the cool shadows of the East Killingly mill, 250 wooden bins line three rooms like oversize caskets. Concascia uses a hose to moisten the manure in the beds and, with a hand from friend Mike Sawaryn, dusts them with chicken feed for his hungry work force of almost 2 million worms.
He scoops up handfuls of fluffy, brown castings. A 5-gallon pail of what was once horse manure, smelling now of nothing but earth, sells for $25. Worms themselves go for $15 per pound, less in bulk.
As he steers his business, Cedar Hill Farms, toward the more proven, but less lucrative, sale of castings to home gardeners, nurseries and possibly a golf course with green ambitions, Concascia balances his disappointment with optimism.
"I didn't want to get rich. I wanted to do something for the environment and make some money on the side so my wife could stay home with the kids," he said.
The growing season just beginning will probably decide the fate of the business.
"I have the summer off from school," Concascia said, "so I'll be hustling." |
