A wide net cast by the U.S. Department of Agriculture and the FBI has landed its final catch—prison time for the last of six Kentucky farmers and a warehouse manager found guilty of a long-running tobacco crop-insurance fraud scheme.
Larry Walden, a 69-year-old farmer in Cave City, was sentenced Dec. 19 to four years in prison after he pleaded guilty to money laundering and crop insurance fraud, according to court records and the U.S. Attorney for Eastern Kentucky. He also must pay almost $10 million in restitution to the crop insurance program, the federal judge ordered.
Six others also have been sentenced in connection with the tobacco scheme, which made it appear that farmers had suffered losses on their crops, from about 2014 to 2023:
- Robert D. Birge, Jr., 51, a Summer Shade farmer, was sentenced to 6 months in prison, three years of supervised release, and was ordered to pay $1.1 million in restitution.
- David Hunt, 63, of Campbellsville, a farmer who obtained fake documentation in order to support fraudulent claims for under an organic tobacco insurance coverage policy, was sentenced to 42 months in prison, three years of supervised release, and $5.4 million in restitution.
- Thomas Kirkpatrick, 67, of Stanford, the former manager of Farmers Tobacco Warehouse, was sentenced to 48 months in prison, two years of supervised release, and was ordered to pay $16 millio 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 was ordered to pay $667,679 in restitution.
- Christopher Wilson, 50, Terry Wilson’s son, was sentenced to 18 months in prison, three years of supervised release, and was ordered to pay $669,447 in restitution.
- David Wisdom, 69, a Glasglow, Kentucky, farmer who used Farmers Tobacco Warehouse, was sentenced to 48 months, followed by three years of supervised release, and was ordered to pay $1.9 million in restitution.
Earlier this month, Harlan Ray Highfield, 63, of Brooksville, Kentucky, was sentenced to 42 months in prison for his role in obtaining crop insurance policies in nominee names, prosecutors said. He was sentenced to three years’ supervised release and was ordered to pay more than $1 million in restitution.
“These defendants fleeced programs intended to protect agricultural producers,” Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky, said in a statement. “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, of 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 of the conspirators.
According to prosecutors, Walden wrote checks to Farmers Tobacco Warehouse to make it appear as though the tobacco he raised and sold was actually purchased from the warehouse. Conspiring with Kirkpatrick, the warehouse manager, Walden received fake receipts in attempts to conceal the scheme.
Walden presented copies of these canceled checks along with fake purchase receipts to his insurance adjuster. The adjuster used the paperwork to justify deflating Walden’s production reports, thereby increasing the indemnity payment, the U.S. Attorney’s office explained. With his proceeds, Walden paid off lines of credit and purchased new assets.
The USDA’s Office of Inspector General led the investigations, along with the agency’s Risk Management Agency Special Investigations staff, the FBI, Internal Revenue Service-Criminal Investigation, and the Kentucky Department of Insurance.
Topics Fraud Agribusiness Kentucky
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