Consumer fraud complaint alleges puppy-laundering scheme in Iowa
A national animal-welfare organization based in Iowa is asking the state’s attorney general to investigate an alleged puppy-laundering scheme documented by the U.S. Department of Agriculture.
The organization Bailing Out Benji, which uses the federal Freedom of Information Act to collect records pertaining to the sale of dogs through breeders, brokers and retailers, says it has collected USDA records related to the dogs and puppies owned by Steve Kruse, the operator of Stonehenge Kennels in West Point.
The organization says those records show Kruse has been cited for numerous USDA violations and been subjected to a USDA warning and license suspension that would normally prohibit him from routing puppies to states that prohibit pet stores from sourcing animals from breeders with violations.
To get around those restrictions, Bailing Out Benji alleges, Kruse transfers his pregnant female dogs to business associates in Iowa, who sell the puppies to retailers under their own name and then return the adult females to Kruse for additional breeding.
“Thousands of puppies are being sold from Steve Kruse’s dogs annually but none of them are tied to him publicly which takes away the consumer’s ability to know the origins of their pet,” Bailing Out Benji’s founder, Mindi Callison, stated in her consumer fraud complaint to the attorney general.
Callison said she believes Kruse’s actions are in direct violation of an Iowa law that makes it a crime for a person to engage in unfair deception in connection with the advertisement or sale of a product if the intent is to have others rely upon that deception.
She said her organization has received six complaints regarding a Kruse associate who sells the puppies born to Kruse’s dogs. Those consumers have reported health issues with their puppies, including worms, giardia and pneumonia, Callison said.
“Because Steve Kruse’s name is being concealed as the true breeder, it is unfair to the consumer who is attempting to research before they buy,” Callison alleges in her complaint. “We are deeply concerned about the mislabeling of his products as they are sold to consumers in stores and online.”
Along with her complaint, Callison sent the attorney general’s office several USDA records that reportedly show the route that dogs and puppies have taken from Kruse, to his associates, and then to retailers.
One such document, a May 2023 “Investigation Report” authored by the USDA, states that Kruse “is in the business of breeding adult dogs and then transferring the pregnant female dogs to Brian Lichrie’s USDA-licensed facility for whelping. Mr. Lichrie used to be Kruse’s employee. Mr. Lichrie is responsible for raising and selling the puppies under his own license (and then transferring) the adult female dogs back to Kruse’s facility for housing and re-breeding.”
Bailing Out Benji has also filed a formal complaint with regulators in Connecticut, which is a state that restricts the sale of puppies from breeders with a history of violations. USDA records show Kruse puppies were routed to Connecticut through Lichrie, Callison said.
Kruse is one of Iowa’s most prolific dog breeders, housing up to 700 dogs at Stonehenge Kennels. Over the years, inspectors have cited Stonehenge for numerous issues, including animals with deep lacerations, oozing wounds and lameness. In December 2015, Kruse received a 21-day USDA suspension after he reportedly threw a bag containing two dead puppies at a USDA inspector.
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