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Alvin Schlangen (right) with his lawyer, Nathan Hansen. (Photo by Kathryn Niflis Johnson)Former Rawesome Food Club manager James  Stewart received bad news today  when a Ventura County judge rejected his request that charges against him in connection with the acquisition of Sharon Palmer’s farm in 2008 be dropped. 

Even though  the evidence against Stewart appears flimsy at best–a flyer posted at Rawesome about the farm acquisition that included his name, and testimony that one lender dropped off a check related  to the transaction at Rawesome in Venice Beach–the judge ruled  that  the evidence is substantive enough that criteria  covering a California 995 motion to dismiss charges hadn’t been met. 

So as the 65-year-old Stewart, noticeably thinner and older looking than when he was arrested in late July, looked on from the prisoner docket, with two of his grown daughters in attendance, the judge sent him back to jail. His lawyer had speculated Stewart had a  good shot at having the charges dropped. 

Still,  Stewart received a dose of potentially encouraging news that puts the case in even greater doubt for the prosecution. Sharon Palmer, operator of Healthy Family Farms in  Ventura County, is understood to have repaid all seven investors she  is charged with defrauding, to the tune of $800,000.    

“Everyone has been repaid with interest,” a source close to Palmer told me after the judge issued her ruling, and Stewart was sent back to jail. They were sent checks about six weeks ago, after Palmer received money from a judgment in in a suit she filed back in 2006 contending the owners of a previous farm she owned had failed to disclose information about a lack of water at the farm.

I spoke  with  one of the  investors  who said, yes, she and her husband had been  repaid. “She (Palmer) made good on  the  whole thing.”  It would seem the prosecution would have difficulty establishing ongoing victim suffering under the circumstances.

The source said that  Palmer’s lawyer made the prosecution aware  that the judgment related to the old farm was coming even before Ventura County filed more than 30 felony counts for  fraud and securities law violations against  her and Stewart, as well as lesser charges against Larry Otting, a real estate developer who helped Palmer get  a $1.1 million mortgage on  the Healthy Family Farms property. 

Palmer “went to the DA and told him  we had the money,” the source said. But the actual disbursement  was  held up for many months by legal technicalities. 

“Someone should call the DA and ask him, ‘What are you holding this  guy (Stewart) for?’ ”

I did that–I  called Senior Deputy District Attorney Chris Harman, and asked him about whether Palmer’s repayment of the debt to individual consumers meant that Stewart should  be freed  and  the case reconsidered. “You need to talk to the defense about  that,” he said, indicating that it would be up  to lawyers for Stewart and Palmer to bring that  information before a judge. 

As for  why Stewart continues to be held, he said, “Stewart is in jail because he is a flight risk,” referring to his failure to appear for a court hearing  in July that led to him  being arrested and jailed. 

Palmer can  be expected to make the case  about  repayment of the lenders when she files a motion under California Rule 995 seeking to have charges against her dropped. Stewart’s next court date is September 25 for  a  pretrial hearing. 

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The prosecution in the trial of Minnesota farmer Alvin Schlangen wrapped up today, having focused heavily  on trying to establish,  as the prosecutor, Michelle Doffing-Baynes, said, “This case is about a man…who chose his business over public safety.”

The judge repeated to the six-person jury several times that they “must follow the law, even if you think the law is or should be different”. Schlangen’s lawyer, Nathan Hansen,  has  said he will  be arguing  that  the law covering  raw milk  and private food  sales is so vague as not  to  be  understandable as to its particular prohibitions.  About  30 Schlangen supporters were present during much of Monday’s proceedings.

The prosecution seemed intent on trying to establish that Schlangen was running a conventional business, rather than a private food club entity. Adam Harmon (Minneapolis Police Officer for 22 years) said that he saw “coolers” and “shelves with food displayed on them” at a Minneapolis warehouse Schlangen used.

James Roettger, a Minnesota Department of Agriculture compliance officer, testified he conducted “a surveillance operation”  to investigate Schlangen on March 9, 2011. Why was he investigating? An “anonymous complaint,” he said, indicating Schlangen was participating in an illegal food operation. 

The judge admitted about 80 or so exhibits– mostly photos of the inside of the warehouse and Alvin’s van and its contents- food, credit cards, “invoices”, “drop tickets”, a product and price list, cancelled checks, and even the Membership Agreement form . 

As the trial continued today, Judge Robert M. Small complimented the behavior of the young children in attendance, who have been parading in and out of the courtroom over the past two days. One supporter said, “It’s the raw milk.”

“I didn’t hear that,” Small replied.

(Still to come, the prosecution’s cross examination of prosecution witnesses and presentation of its own witnesses.)