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7 Kentucky farmers sentenced in $37 million crop insurance fraud scheme
A Cave City farmer was sentenced to 52 months incarceration after pleading guilty to conspiring to commit money laundering by committing crop insurance fraud.
According to his plea agreement, 69-year-old Larry Walden owned and rented farmland in Barren County, on which he grew burley tobacco. He maintained insurance coverage over his tobacco crop from at least 2014 to 2023. For Crop Years 2014 through 2019, Walden used services offered at Farmers Tobacco Warehouse in Boyle County to obtain false documentation to support false claims of loss on his crop insurance.
As part of the conspiracy, Walden wrote checks to Farmers Tobacco Warehouse, to make it appear as though the tobacco he raised and sold was actually purchased from Farmers Tobacco Warehouse. Conspiring with Thomas Kirkpatrick, manager at Farmers Tobacco Warehouse, Walden also received fake receipts in further attempts to conceal the scheme.
Walden presented copies of the cancelled checks and fake purchase receipts to his insurance adjuster, who used the paperwork to deflate Walden’s production reports, thereby increasing his indemnity payment. With his proceeds, Walden paid off lines of credit and purchased new assets.
Walden also admitted to running the same fraud scheme through Greensburg Tobacco Market and Fair Deal Tobacco, located in Greensburg, Ky., and Littleton, North Carolina, respectively. He further sold tobacco under the names of neighbors and relatives without reporting that production on his insurance claims.
In total, Walden’s fraud caused $9,960,000 in loss to crop insurers. Upon his release, Walden will be under the supervision of the U.S. Probation Office for 3 years, and is ordered to pay back the full amount in restitution.
Other farmers have also been sentenced for their role in the same conspiracy to commit crop insurance fraud and have been sentenced:
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 $16.2 million in restitution.
David Hunt, 63, of Campbellsville, a farmer who obtained fake documentation from Kirkpatrick in order to support fraudulent claims to indemnity payments 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.
Terry Wilson, 67, of Edmonton, a farmer who used Farmer Tobacco Warehouse to facilitate his fraud conspiracy, was sentenced to time served, followed by three years of supervised release, and was ordered to pay $667,000 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 $669,000 in restitution.
David Wisdom, 69, of Glasglow, who used Farmer Tobacco Warehouse to facilitate his fraud conspiracy, was sentenced to 48 months, followed by three years of supervised release, and was ordered to pay $1.9 million in restitution.
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.
Additionally, earlier this month, Harlan Ray Highfield, 63, of Brooksville, Ky., was sentenced to 42 months’ incarceration, stemming from his crop insurance fraud scheme that involved obtaining crop insurance policies in nominee names, among other offenses. He was sentenced to three years’ supervised release and was ordered to pay $1 million in restitution.
Under federal law, these defendants must serve 85 percent of their prison sentences.
The investigation was conducted by the United States Department of Agriculture Office of Inspector General, United States Department of Agriculture Risk Management Agency Special Investigations Staff, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation.
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