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Defendant Sentenced and Ordered to Pay $5.6 Million to RMA for Crop Insurance Fraud 

Scheme; Co-Defendant Pleads Guilty—North Carolina

On May 29, 2018, in U.S. District Court, Eastern District of North Carolina, a producer pled guilty to 

conspiracy to make false statements to the Federal Crop Insurance Corporation (FCIC) and conspiracy 

to commit money laundering. His sentencing is scheduled for August 2018. The following day, the 

producer’s father (and co-defendant) was sentenced to 25 months in prison and was ordered to pay 

$5.6 million in restitution to the Risk Management Agency (RMA) and $69,400 to the Farm Service 

Agency (FSA). The court also ordered forfeiture of $5.6 million to be applied toward restitution. A 

joint investigation disclosed that the defendants conspired to hide crop production and sell production in 

nominee names. This fraud enabled them to receive $5.6 million in indemnity payments and 

$219,650 in disaster payments to which they were not entitled. The father pled guilty to conspiracy, 

FCIC fraud, aiding and abetting, aggravated identity theft, and money laundering.1

Defendant Ordered to Pay $1.49 Million in Restitution to RMA for False Statements Pertaining to 

Crop Insurance—North Carolina

On May 30, 2018, in U.S. District Court, Eastern District of North Carolina, a man was sentenced to 

1 day in Federal custody, 5 years of supervised release, and ordered to pay $1,499,000 in restitution to 

RMA and $88,000 in restitution to FSA. The court also ordered forfeiture of $1,499,000, which will be 

applied toward restitution. OIG investigated allegations of crop insurance fraud involving three 

producers. The investigation showed that individuals conspired to hide and ultimately sell production in 

nominee names, which resulted in them receiving $1,499,000 in indemnity payments and $88,000 in 

disaster payments to which they were not entitled. The defendant pled guilty to conspiracy and making 

false statements to FCIC.

Store Owner Sentenced and Ordered to Pay $1 Million for SNAP Fraud—Pennsylvania

On May 17, 2018, in U.S. District Court, Eastern District of Pennsylvania, a store owner was sentenced 

to 8 months in prison and was ordered to pay $1.06 million in restitution, jointly and severally, with her 

husband, the store’s co-owner. Her husband was previously sentenced in April 2018 to 2 years in prison 

and the same restitution. He was also ordered to forfeit the commercial property used as a seafood and 

meat store. During the course of the joint investigation, the storeowners and other employees exchanged 

SNAP benefits for cash. The store redeemed over $2.9 million in SNAP benefits since September 2011. 

Both defendants pled guilty to multiple counts of SNAP fraud.2

 1 This was a joint investigation by USDA OIG, Internal Revenue Service-Criminal Investigations, and RMA’s Special 

Investigation Branch.

2 This was a joint investigation with two Department of Homeland Security agencies (Immigration and Customs 

Enforcement, and Homeland Security Investigations) and the Reading Police Department in Pennsylvania.

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

Investigations Bulletin

June 29, 2018
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Defendant Sentenced and Ordered to Pay $652,000 in Restitution for Loan Application Fraud—

Oklahoma

On May 30, 2018, in U.S. District Court, Western District of Oklahoma, a livestock operator was 

sentenced to 21 months in prison and ordered to pay approximately $652,000 in restitution. The 

investigation began when OIG received information from the Federal Bureau of Investigation that a man 

had defaulted on stocker cattle loans FSA had guaranteed through an Oklahoma bank. The investigation 

revealed that, during a 4-month period, the defendant knowingly pledged livestock that did not belong to 

him as collateral and submitted false statements to the private bank and FSA to refinance a loan. He 

pled guilty to loan application fraud.

Slaughterhouse Operator Sentenced for Adulteration of Meat Held for Sale—Washington

On May 11, 2018, in U.S. District Court, Western District of Washington, a custom slaughterhouse 

operator was sentenced to 90 days in prison, 1 year of probation, and ordered to pay a $2,500 fine for 

adulterating meat being held for sale. This slaughterhouse’s license was revoked by the Washington 

State Department of Agriculture (WSDA), but in February 2017, OIG observed that animal slaughter 

was continuing on a large scale (500 estimated livestock) at the premises. During the investigation, 

OIG observed the purchase of a cow head over 30 months of age, which is considered Specified Risk 

Material (SRM). SRMs are susceptible to acquiring Bovine Spongiform Encephalopathy, or “mad cow 

disease.” OIG also observed the operator purchasing contaminated internal organs and an adulterated 

whole sheep.

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Farm Operator Sentenced and Ordered to Pay $103,000 in Restitution to RD for Fraud—

Michigan

On April 20, 2018, in U.S. District Court, Western District of Michigan, a farm owner/operator was 

sentenced to 7 months in prison, followed by 2 years of supervised release, and was ordered to pay 

$103,000 in restitution payable to Rural Development (RD). The defendant pled guilty to making false, 

fictitious, or fraudulent claims related to RD’s Value-Added Producer Grant (VAPG) process. These 

grants provide up to $200,000 in working capital for independent producers. The defendant was 

awarded a VAPG to continue her organic blueberry farming operation in southwest Michigan. The 

investigation determined that the defendant diverted grant funds for her personal use.

Bakery and Owner Sentenced and Ordered to Pay $747,000 in Restitution for Conspiracy to 

Commit SNAP Fraud—Massachusetts

On April 24, 2018, in U.S. District Court, District of Massachusetts, a bakery and its owner were 

sentenced—1 year of probation for the bakery, and 1 year in prison followed by 1 year of supervised 

release for the owner. Both the bakery and the owner were ordered to pay $747,000 in restitution and an 

order of forfeiture was issued for $747,000. This investigation revealed that the bakery owner illegally 

redeemed and exchanged SNAP benefits while not authorized to participate in SNAP. The 

SNAP transactions conducted at the bakery were processed through SNAP-authorized stores nearby. 

The owner pled guilty on behalf of himself and the bakery to conspiracy to commit SNAP fraud. Two 

 3 Food Safety Inspection Service investigators, King County Sheriff’s Office personnel, King County Animal Services 

personnel, and WSDA personnel assisted in the investigation. 
3

of the authorized stores were indicted as corporations on charges of conspiracy to commit SNAP fraud.

A seizure warrant was issued for assets approximating $367,000 owned by one of the stores.

Defendant Sentenced to Probation and $30,000 Fine for Illegal Transport of Wildlife—Kansas

On May 21, 2018, in U.S. District Court, District of Kansas, a defendant pled guilty to knowingly 

importing, transporting, and acquiring wildlife that was not from an accredited herd. He was sentenced 

to 5 years of probation and ordered to pay a $30,000 fine. This joint investigation sought to determine if 

the owner of an outfitting group fraudulently transported domesticated white-tailed deer to Kansas for 

high fence game hunts. This investigation disclosed that the defendant transported numerous whitetailed deer from Pennsylvania to Kansas without an Interstate Certificate of Veterinary Inspection.4

Store Owner Sentenced and Ordered to pay $285,000 Restitution on SNAP and Counterfeit 

Goods’ Charges—Massachusetts

On April 25, 2018, in U.S. District Court, District of Massachusetts, a fashion store owner was 

sentenced to 8 months in prison to be followed by 3 years of supervised release. The defendant was 

ordered to pay $285,000 in restitution and an order of forfeiture was issued for the same amount. The 

investigation was initiated due to an increase in SNAP redemptions at the store following 

OIG’s execution of search warrants at several nearby retail food stores. The joint investigation 

determined that the store was trafficking SNAP benefits. The store exchanged SNAP benefits for 

U.S. currency in addition to counterfeit high-end handbags and apparel. The owner pled guilty to 

charges related to trafficking in SNAP benefits and counterfeit goods.5

 4 The investigation was conducted by USDA OIG with the U.S. Fish and Wildlife Service, Kansas Department of Wildlife 

and Parks, and USDA’s Animal and Plant Health Inspection Service.

5 The investigation was conducted by USDA OIG, HSI, and the Retailer Investigations Branch of the Food and Nutrition 

Service.