Theft probe targets Burrill Timber: Ashland loggers also suspected – March 17, 1998

Theft probe targets Burrill Timber: Ashland loggers also suspected

Mail Tribune

Medford, Oregon
March 17, 1998
WHITE CITY — Federal agents are investigating Burrill Timber Co. in connection with the alleged theft of federal timber in the Rogue River National Forest.
According to an affidavit unsealed Monday in U.S. District Court in Eugene, a Burrill contract logger cut trees not designated for logging and left behind logs of lesser value that should have been purchased. The contract logger was identified as Timberland Logging, an Ashland company that did some logging for Burrill Timber in the $762,190 Jack Burns timber sale, situated near Crater Lake National Park.
There have been no charges filed against any of the parties under investigation.


Dennis Kenneth Castro-Shrader, a U.S. Forest Service special agent, said in the affidavit for the search warrant that he had “reason to believe” Burrill Timber, Timberland Logging and others “are involved in a conspiracy to damage government property (timber) and steal government timber.”
He named Daniel Goltz, vice president of Burrill Timber; Steve Potwin, Burrill’s purchaser representative; Bob Ferreira, president of Timberland Logging; and Tim Ferreira and Curtis Smith, Timberland employees.
The affidavit, an explanation of why agents wanted to search Burrill Timber Co. records, became public Monday after the court rejected a motion by the U.S. attorney’s office to seal the document.
Armed investigators last week examined computer files and other documents at Burrill Timber Co. in White City as part of their investigation.
Burrill Timber is a separate corporation from Eugene F. Burrill Lumber Co., although they have the same White City address, 8425 Agate Road. Burrill Timber is the portion of the operation that buys and sells timber, while the Eugene F. Burrill Lumber Co., which closed its stud mill last month, processed the logs.
Mike Burrill, president of both companies, was unavailable for comment Monday. Company controller Diane Hearth said Burrill was on a previously planned out-of-state business trip.
She said Burrill Timber has not been involved in crimes.
“I have no doubt that every term of the contract has been complied with,” Hearth said. “This company has an excellent reputation.”
She noted that the affidavit is the opinion of the investigator, and not necessarily fact.
“We need to realize that a lot of the information in there could be incorrect,” she said.
Hearth said she knew of no one yet being charged with any crimes relating to the case. Others named in the affidavit either could not be reached for comment or did not return phone calls.
John Ray, chief assistant to the U.S. attorney in Eugene, also did not return phone calls Monday.
According to the affidavit, the companies and employees named are suspected of five crimes: conspiracy to defraud the government, theft of governmental property, depredation against governmental property or contracts, covering up facts and making false statements.
The Jack Burns timber sale was awarded to Burrill Timber in June 1995. The contract required Burrill to remove not just the best trees, but all logs that were 50 percent or more void of soft matter, char or pitch. These lesser logs are called firmwood fiber, which is most often processed into pulp for making paper.
Under the contract, the government was to be paid for all firmwood fiber in the Jack Burns sale.
Burrill Timber contracted with Timberland and another company to log the site. But, after the sale, the market for firmwood fiber dropped, according to the affidavit.
In July 1996, Burrill Timber sought to modify the contract to allow it to leave firmwood fiber at the site, because it wasn’t profitable to log it. Officials denied the request, the affidavit said.
In August 1996, Forest Service workers found that trees that were supposed to have been left at the site were cut, according to the affidavit. Forest Service officials issued warnings to Burrill Timber and Timberland Logging, the affidavit said.
Then, an unnamed source told Castro-Shrader that Burrill Timber and Timberland Logging had conspired to “defraud the Forest Service.” A number of logging sites were checked, Castro-Shrader said in his affidavit.
In September 1997, after the sale was complete, Castro-Shrader went to the sale site. He said he found 45 trees cut that were not designated for removal and firmwood logs that were supposed to have been purchased but were instead left at the site.
In October 1997, Castro-Shrader said he used a backhoe to probe two of nine slash piles at the site, and he said he found more such evidence.
He said that when he reviewed timber sale records, he found additional inconsistencies between the contract and the actual logging.
“Enough physical evidence was seized in this preliminary probe to fill a dump truck,” Castro-Shrader said in the affidavit.