Tobacco broker sentenced in crop fraud case [The Wilson Daily Times, N.C.]

March 25--A tobacco broker who did business in Wilson will serve 5 1/2 years in prison and repay more than $13 million for his role in a crop insurance fraud scheme, federal prosecutors said.

Jesse Ray "Tommy" Faulkner II, 54, of Southern Pines, was sentenced Thursday after pleading guilty in December to money laundering conspiracy and mail and wire fraud conspiracy charges. Chief U.S. District Judge James C. Dever III handed down the sentence in a Raleigh federal courtroom.

"Today's sentence reflects the harm committed on our community as a result of this massive, multi-million-dollar fraud scheme and should serve as a deterrent for tobacco brokers, warehousemen and receiving station operators who are contemplating helping farmers sell hidden tobacco and file false claims," U.S. Attorney Thomas G. Walker said in a statement.

Faulkner operated independent tobacco receiving stations in Wilson and also worked as an agent for Phillip Morris USA. Prosecutors said he bought and sold tobacco from farmers off the books to help them report lower production totals. Farmers filed false crop insurance claims and were paid for losses they didn't suffer.

Prosecutors said Faulkner resold his off-the-books tobacco to Phillip Morris. He sold or caused to be sold nearly $5.2 million worth of "hidden" flue-cured tobacco in North Carolina and sold or caused to be sold nearly $8.1 million in "hidden" burley tobacco in Kentucky, according to the U.S. attorney's office.

The U.S. Department of Agriculture's Office of the Inspector General, USDA Risk Management Agency and the Internal Revenue Service investigated the case.

"This sentence will deter other agricultural businessmen from engaging in illegal business practices which facilitate fraud in the federal crop insurance program and other USDA programs and safeguarding our tax dollars," USDA Office of Inspector General Special Agent in Charge Karen Citizen-Wilcox said.

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