A federal indictment charges two owners, as well as two employees, of the now-defunct Rancho Feeding Corporation, a livestock slaughterhouse located in Petaluma, California, with violating the Federal Meat Inspection Act (FMIA) by fraudulently processing and distributing condemned and diseased cattle.

The indictment, returned by a federal grand jury in San Francisco, California, on Aug. 14, 2014, charges Rancho owner Jesse “Babe” Amaral Jr., 76, and Eugene Corda, 65, both of Petaluma, California, and Felix Cabrera, 55, of Santa Rosa, California, with distribution of adulterated, misbranded and uninspected meat, conspiracy to commit the same and mail fraud conspiracy in furtherance of the same scheme.

The indictment also charges Amaral with mail fraud and mail fraud conspiracy in a separate scheme to defraud farmers by means of false invoicing.

The information charges Rancho owner Robert Singleton, 77, of Petaluma, California, with one count of distribution of adulterated, misbranded and uninspected meat.

Federal officials alleged that between mid to late 2012 and Jan. 10, 2014, Amaral instructed Cabrera to process cattle that had been condemned by the U.S. Department of Agriculture (USDA) veterinarian.

Based on this instruction, Cabrera directed Rancho employees under his supervision to carve “USDA Condemned” stamps out of the cattle carcasses and to process the carcasses for transport, sale and distribution.

As a result of this conspiracy, Rancho distributed more than 100 condemned cattle.

During this same time frame, Amaral and Singleton directed Cabrera and Corda to circumvent inspection procedures for cattle showing signs of epithelioma, or “cancer eye,” a disease that can result in condemnation.

Federal officials alleged that at Amaral’s and Singleton’s instructions, Rancho employees including Cabrera and Corda engaged in a scheme to slaughter cancer eye cows during USDA inspectors’ lunch breaks, a time during which plant operations were supposed to cease, and then to conceal the diseased cow heads by swapping them with healthy cow heads for the purpose of post mortem inspections.

As a result, Rancho distributed approximately 79 diseased cattle that did not undergo full USDA inspection.

Between 2012 and January 2014, Amaral conspired to and did fraudulently charge farmers “handling fees” based on false statements that their cattle had died or been condemned, when in fact he knew that the cattle had been sold for human consumption.

As a result of this investigation, in February 2014, Rancho voluntarily recalled approximately 8.7 million pounds of beef products.

Amaral’s and Corda’s initial appearances on the indictment took place this morning in federal court in San Francisco.