Final Kentucky Crop Insurance Fraudster Receives Prison Sentence

A wide net cast by the U.S. Department of Agriculture and the FBI has culminated in prison sentences for the last of six Kentucky farmers and a warehouse manager involved in a long-running tobacco crop-insurance fraud scheme.

Larry Walden, a 69-year-old farmer from Cave City, was sentenced on December 19 to four years in prison after pleading guilty to money laundering and crop insurance fraud. Court records indicate that he must also pay nearly $10 million in restitution to the crop insurance program, as ordered by a federal judge here.

Five other individuals have also received sentences related to this tobacco scheme, which falsely indicated that farmers had suffered crop losses from approximately 2014 to 2023:

• Robert D. Birge, Jr., 51, a farmer from Summer Shade, was sentenced to six months in prison, three years of supervised release, and ordered to pay $1.1 million in restitution.
• David Hunt, 63, from Campbellsville, obtained fake documentation to support fraudulent claims under an organic tobacco insurance policy. He was sentenced to 42 months in prison, three years of supervised release, and $5.4 million in restitution.
• Thomas Kirkpatrick, 67, the former manager of Farmers Tobacco Warehouse, received a 48-month prison sentence, two years of supervised release, and was ordered to pay $16 million in restitution.
• Terry Wilson, 67, an Edmonton farmer who used Farmers Tobacco Warehouse to facilitate his conspiracy, was sentenced to time served, followed by three years of supervised release, and ordered to pay $667,679 in restitution.
• Christopher Wilson, 50, Terry Wilson’s son, received an 18-month prison sentence, three years of supervised release, and was ordered to pay $669,447 in restitution.
• David Wisdom, 69, a farmer from Glasgow, Kentucky, who also used Farmers Tobacco Warehouse, was sentenced to 48 months in prison, followed by three years of supervised release, and ordered to pay $1.9 million in restitution.

Earlier this month, Harlan Ray Highfield, 63, from Brooksville, Kentucky, was sentenced to 42 months in prison for his role in obtaining crop insurance policies under nominee names. He was also sentenced to three years of supervised release and ordered to pay over $1 million in restitution.

“These defendants fleeced programs intended to protect agricultural producers,” stated Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky. “While the vast majority of farmers conduct themselves with great integrity, the sentences imposed in these cases should serve as a warning to any producers or warehouse operators considering similar crop insurance fraud.”

Related investigations have led to guilty pleas from other farmers and from Michael McNew, a former insurance adjuster turned insurance agent. McNew, from Mt. Sterling, was sentenced to 86 months in prison for inflating or fabricating crop damage claims and was ordered to pay millions in restitution.

Walden appears to have received one of the longest sentences among the conspirators. Prosecutors revealed that he wrote checks to Farmers Tobacco Warehouse to create the illusion that the tobacco he raised and sold was actually purchased from the warehouse. In collusion with Kirkpatrick, Walden received fake receipts to conceal the scheme.

Walden presented copies of these canceled checks along with fraudulent purchase receipts to his insurance adjuster. This paperwork was used to justify deflating Walden’s production reports, thereby increasing the indemnity payment, as explained by the U.S. Attorney’s office. With the proceeds, Walden paid off lines of credit and acquired new assets.

The USDA’s Office of Inspector General led the investigations, collaborating with the agency’s Risk Management Agency Special Investigations staff, the FBI, the Internal Revenue Service-Criminal Investigation, and the Kentucky Department of Insurance.

Topics
Fraud
Agribusiness
Kentucky

A wide net cast by the U.S. Department of Agriculture and the FBI has culminated in prison sentences for the last of six Kentucky farmers and a warehouse manager involved in a long-running tobacco crop-insurance fraud scheme.

Larry Walden, a 69-year-old farmer from Cave City, was sentenced on December 19 to four years in prison after pleading guilty to money laundering and crop insurance fraud. Court records indicate that he must also pay nearly $10 million in restitution to the crop insurance program, as ordered by a federal judge here.

Five other individuals have also received sentences related to this tobacco scheme, which falsely indicated that farmers had suffered crop losses from approximately 2014 to 2023:

• Robert D. Birge, Jr., 51, a farmer from Summer Shade, was sentenced to six months in prison, three years of supervised release, and ordered to pay $1.1 million in restitution.
• David Hunt, 63, from Campbellsville, obtained fake documentation to support fraudulent claims under an organic tobacco insurance policy. He was sentenced to 42 months in prison, three years of supervised release, and $5.4 million in restitution.
• Thomas Kirkpatrick, 67, the former manager of Farmers Tobacco Warehouse, received a 48-month prison sentence, two years of supervised release, and was ordered to pay $16 million in restitution.
• Terry Wilson, 67, an Edmonton farmer who used Farmers Tobacco Warehouse to facilitate his conspiracy, was sentenced to time served, followed by three years of supervised release, and ordered to pay $667,679 in restitution.
• Christopher Wilson, 50, Terry Wilson’s son, received an 18-month prison sentence, three years of supervised release, and was ordered to pay $669,447 in restitution.
• David Wisdom, 69, a farmer from Glasgow, Kentucky, who also used Farmers Tobacco Warehouse, was sentenced to 48 months in prison, followed by three years of supervised release, and ordered to pay $1.9 million in restitution.

Earlier this month, Harlan Ray Highfield, 63, from Brooksville, Kentucky, was sentenced to 42 months in prison for his role in obtaining crop insurance policies under nominee names. He was also sentenced to three years of supervised release and ordered to pay over $1 million in restitution.

“These defendants fleeced programs intended to protect agricultural producers,” stated Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky. “While the vast majority of farmers conduct themselves with great integrity, the sentences imposed in these cases should serve as a warning to any producers or warehouse operators considering similar crop insurance fraud.”

Related investigations have led to guilty pleas from other farmers and from Michael McNew, a former insurance adjuster turned insurance agent. McNew, from Mt. Sterling, was sentenced to 86 months in prison for inflating or fabricating crop damage claims and was ordered to pay millions in restitution.

Walden appears to have received one of the longest sentences among the conspirators. Prosecutors revealed that he wrote checks to Farmers Tobacco Warehouse to create the illusion that the tobacco he raised and sold was actually purchased from the warehouse. In collusion with Kirkpatrick, Walden received fake receipts to conceal the scheme.

Walden presented copies of these canceled checks along with fraudulent purchase receipts to his insurance adjuster. This paperwork was used to justify deflating Walden’s production reports, thereby increasing the indemnity payment, as explained by the U.S. Attorney’s office. With the proceeds, Walden paid off lines of credit and acquired new assets.

The USDA’s Office of Inspector General led the investigations, collaborating with the agency’s Risk Management Agency Special Investigations staff, the FBI, the Internal Revenue Service-Criminal Investigation, and the Kentucky Department of Insurance.

Topics
Fraud
Agribusiness
Kentucky