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Office of Inspector General / U.S. Department of Agriculture 

Investigations Bulletin

January 25, 2017

Producer Sentenced to Incarceration and Ordered to Pay $5.9 Million to USDA for Fraud 

in Farm Programs—Louisiana

On December 19, 2017, in the Western District of Louisiana, Monroe Division, a producer was 

sentenced to 9 years of incarceration and was ordered to pay $4.3 million in restitution to the 

Farm Service Agency (FSA) and the Risk Management Agency. The court also ordered the 

defendant to pay a $1.6 million forfeiture judgment to USDA. OIG conducted this investigation 

to determine if the producer conspired with others to defraud USDA by falsifying documents 

submitted to FSA. OIG determined that during a six-year period, the defendant created 

fraudulent farming entities to obtain subsidy payments from the Direct and Countercyclical 

Program and the Supplemental Revenue Assistance Program. The defendant was found guilty in 

a jury trial on charges related to mail fraud and money laundering. 

Storeowner and Father Sentenced and Ordered to Pay $1.3 Million in Restitution for 

SNAP Trafficking—Louisiana 

On November 29, 2017, in U.S. District Court, Western District of Louisiana, a storeowner was 

sentenced to 1 year in prison and 3 years of probation. On the same day, his co-conspirator 

father was sentenced to 5 years of probation. The defendants were ordered to pay $1.3 million in 

restitution, jointly and severally. OIG conducted this investigation to determine if the owners of 

the store were trafficking Supplemental Nutrition Assistance Program (SNAP) benefits with 

multiple SNAP recipients. Evidence demonstrated that the owners were exchanging SNAP 

benefits for cash. A financial analysis revealed the defendants received more than $1 million 

from SNAP trafficking. They pled guilty to SNAP benefit trafficking and conspiracy.1

Defendant Sentenced for Fraud in Hispanic and Women Farmers and Ranchers 

Program—Oklahoma 

On November 21, 2017, in U.S. District Court, Western District of Oklahoma, a defendant was 

sentenced to four months in prison to be followed by four months in a halfway house and 2 years 

of supervised release and was ordered to pay $50,000 in restitution. This case was based on a 

referral from a county District Attorney’s Office and the Oklahoma Department of Human 

Services, Adult Protective Services office. OIG opened an investigation to determine if the 

defendant falsely submitted claims to USDA’s Hispanic and Women Farmers and Ranchers 

Claims Program. The investigation determined that the defendant falsely represented herself as 

1 The Louisiana Department of Family and Children Services assisted in this investigation.
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her mother and received a settlement payment of $50,000. Thereafter, the defendant added her 

mother as a joint payee to the defendant’s bank account without mother’s consent, deposited the 

check, and attempted to withdraw funds. The defendant pled guilty to charges of false 

statements, theft of public money, civil forfeiture, and criminal forfeiture.

Former Children’s Feeding Program Sponsor Sentenced to Lengthy Prison Term and $3 

Million in Restitution—Arkansas 

On December 6, 2017, in U.S. District Court, Eastern District of Arkansas, a sponsor of a 

Summer Food Service Program (SFSP) and At-Risk Afterschool Program (ARAP) was 

sentenced to 12.5 years in prison, ordered to forfeit several properties, and ordered to pay 

$3 million in restitution, jointly and severally. For three school years, this sponsor received more 

than $2.7 million from ARAP. OIG’s investigation determined that the defendant paid $79,000 

in bribes to two Arkansas Department of Human Services (ADHS) employees for approving 

defendant’s program applications with inflated estimates of children to be fed. The numbers of 

meals claimed by the sponsor for payment were not scrutinized by ADHS as long as the number 

was below the application amounts. OIG’s investigation determined that the defendant took at 

least $950,000 from the feeding program funds’ for personal use. This case is part of a larger 

conspiracy of cases involving sponsors who operated SFSP and ARAP. To date, 13 individuals 

have been convicted for their involvement in these cases. 

Defendant Sentenced to Imprisonment and Restitution for Receiving Child Pornography and Theft 

of Funds—Illinois 

On December 12, 2017, a former local economic development association official was sentenced 

in U.S. District Court, Southern District of Illinois, to 9 years of imprisonment, five years of 

supervised release, and ordered to pay $54,800 in restitution. OIG opened an investigation to 

determine if the defendant stole Intermediary Relending Program (IRP) funds provided Rural 

Development to the development association and if he possessed, or was involved in, the 

production of child pornography. The investigation disclosed that the defendant knowingly 

received child pornography. Regarding IRP funds, the investigation determined that the 

defendant paid himself extra salary that was not authorized. Additionally, after his termination 

from the association, the defendant directed a business to send monthly IRP loan payments 

intended for PCDA to his personal post office box. He later deposited those IRP funds in his 

personal bank account, fraudulently obtaining $51,800 in IRP funds. The defendant pled guilty 

to four counts of receiving child pornography and one count of mail fraud pertaining to the theft 

of IRP funds. This was a joint investigation with USDA OIG, Federal Bureau of Investigation, 

and Illinois State Police.

Multiple Defendants Sentenced for Dog Fighting and Narcotics Trafficking Offenses—

North Carolina

Eight defendants were sentenced recently in an investigation initiated by the Wilmington Safe 

Streets Task Force of the Federal Bureau of Investigation. Although the investigation focused on 

narcotics trafficking in Onslow County and the surrounding area, investigators then realized the 

subjects were also involved in illegal dog fighting. The defendants engaged in breeding, 
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training, selling fighting dogs, and sponsoring dog fighting contests. The Task Force and United 

States Attorney’s Office for the Eastern District of North Carolina contacted OIG to request 

assistance with the animal fighting aspects of the case. The eight defendants were sentenced on 

November 28, 2017, December 1, 2017, and December 22, 2017, in the Eastern District of North

Carolina for narcotics trafficking and dog fighting offenses. The defendants received sentences

ranging from 4 years of probation and 6 months of home detention and community service, to 9 

years in prison. Three of the defendants were also fined in the amounts of $25,000; $25,000; and 

$5,000, respectively. 

Mortgage Loan Company Employee Sentenced and Ordered to Pay $108,000 in Restitution 

for False Statements—Massachusetts

On December 15, 2017, in U.S. District Court, District of Massachusetts, an accountant for a 

mortgage loan servicer was sentenced to 1 year of probation and was ordered to pay $108,000 in 

restitution. The accountant had pled guilty to making false statements. OIG and its investigative

partners determined that a mortgage loan servicer and its president defrauded the Government 

National Mortgage Association (Ginnie Mae).2

 The investigation revealed that the company’s

president misappropriated approximately $2.5 million in borrower payments for his own 

personal and business use. He attempted to cover up his scheme by providing false reports to 

Ginnie Mae about the status of the loans his company was servicing. The president pled guilty to 

conspiracy and wire fraud. His sentencing is pending.3

Store Owner Sentenced and Ordered to Pay $725,000 in Restitution for SNAP

Trafficking—California

On November 27, 2017, in U.S. District Court, Central District of California, a store owner was 

sentenced to 2 years of probation—including 1 year of home detention—and was ordered to pay 

$725,000 in restitution. OIG received a referral from the Food and Nutrition Service, Retailer 

Investigations Branch, regarding possible SNAP trafficking at the store. During OIG’s

investigation, the storeowner exchanged cash for SNAP benefits multiple times in the store. In

September 2017, the storeowner pled guilty to one count of trafficking in SNAP benefits.

2 Ginnie Mae guarantees the timely payment of principal and interest to investors in bonds backed by Government 

sponsored mortgage loans, such as those offered by the Federal Housing Administration, the Department of 

Veterans Affairs, and USDA.

3 This investigation was conducted jointly with the Department of Housing and Urban Development’s OIG, the 

Department of Veterans Affairs’ OIG, and the Federal Bureau of Investigation.