It was announced by U.S. Attorney Karen Loeffler on Friday that 57-year-old Wasilla resident Karen Olsen has been indicted by a Grand Jury for defrauding the state of Alaska as well as making false statements to the U.S. Department of Agriculture.

Olson was the sole defendant named in the six-count indictment. According to the indictment, Olson, in September of 2008, while an investor and CEO of Valley Dairy came up with a scheme to illegally obtain a $430,000 loan from the state of Alaska, Division of Agriculture. She did so to cover up the true nature of the Valley Dairy finances and the losses caused by the alleged illegal activity of the former co-owner and president of the dairy.

Valley Dairy did business as the Matanuska Creamery in Palmer. That Creamery is no longer operating. In December, Olson blamed a competing startup, as well as added costs brought on by a failing septic system for it inability to repay its loans. On December 5th, the Board of Agriculture made their determination that they would not reconcider their earlier decision to cease making any more loans or loan modifications to the creamery.

That individual, Kyle E. Beus, was indicted in December of 2012, he is currently awaiting trial. Beus is alleged to have schemed to obtain money from the U.S. Department of Agriculture by submitting false documents beginning in December, 2007. He did so to draw down the proceeds from two federal grants worth $643,000 that was awarded by the U.S. Department of Agriculture meant to support a milk, cheese and ice cream manufacturing facility in Alaska.

Beus converted some of those funds to his own personal use.

In an attempt to convince the USDA Rural Development to allow the state of Alaska to take first lien position on the equipment purchased with the proceeds of the USDA Valley Dairy grants, Olson submitted false documents to the USDA. She was also charged in the indictments for submitting those false statements.

Assistant U.S. Attorney Retta Randall presented the case to the Grand Jury. Randall indicates that the law provides for a maximum sentence of 30 years and a $1 million fine if convicted on the charges.