A Kentucky tobacco warehouse manager at the center of a long-running crop insurance fraud scheme has agreed to pay millions in restitution for his role in enabling the fraud.
Thomas Kirkpatrick, of Danville, pleaded guilty last week to conspiracy to commit money laundering by providing paperwork to farmers, purporting to show they purchased tobacco from the warehouse from 2014 through 2020, according to court documents and local news reports.
In reality, Kirkpatrick reimbursed the farmers – minus a fee for himself. The tobacco raisers then used the checks and invoices to claim decreased production and losses on their federal crop insurance, prosecutors said.
“It was the purpose of the conspiracy to profit from generating false documentation that made it appear as though farmers purchased tobacco they actually produced from Farmers Tobacco Warehouse, which the farmers then submitted to their insurance adjusters in order to decrease their production reported to the FCIC, leading to inflated insurance indemnity payments,” reads Kirkpatrick’s March 25 indictment.
At least three of the farmers have pleaded guilty so far. Kirkpatrick struck a plea agreement with prosecutors last week. He will be jointly and severaly responsible for the $16.1 million in restitution, along with six other defendants, the agreement notes.
He is set for sentencing on Oct. 14 in federal court in Lexington. In addition to the millions in restitution, Kirkpatrick faces fines and up to 20 years in prison, the Lexington Herald-Leader reported.
The plea agreement can be seen here.
Topics Fraud
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