Another KY farmer sentenced in multi-million-dollar tobacco crop fraud conspiracy

A Cave City man is the latest Kentucky farmer sentenced in a widespread fraud scheme after he claimed fake losses on tobacco crops to rake in insurance proceeds.

Larry Walden, 69, pleaded guilty and was sentenced Dec. 19 for conspiring to commit money laundering by crop insurance fraud, according to a Monday release from the U.S. Attorney’s Office, Eastern District of Kentucky. At least six other farmers have also pleaded guilty in cases related to the scheme, along with a tobacco warehouse manager.

Walden, who grew burley tobacco and more on a Barren County farm, began making claims of false losses in 2014 using forged documentation from Farmers Tobacco Warehouse, a Danville business, according to the plea agreement.

In conjunction with warehouse manager Thomas Kirkpatrick, Walden provided his adjuster with fake receipts and other documentation through 2019 indicating he sold tobacco to the company, using the paper trail to make insurance claims for crop losses. He used proceeds from the payouts to pay off debt and more.

Walden used a similar scheme through another Kentucky tobacco business, Greensburg Tobacco Market, and one in North Carolina. He also sold tobacco under other names and withheld reporting those sales through his insurance, officials said.

In all, Walden’s part in the scheme cost insurers nearly $10 million.

“These defendants fleeced programs intended to protect agricultural producers,” first assistant U.S. attorney for the Eastern District of Kentucky Paul McCaffrey said in the release. “While the vast majority of farmers conduct themselves with great integrity, the sentenced imposed in these cases should serve as a warning to any producers or warehouse operators considering similar crop insurance fraud.”

U.S. District Judge Karen Caldwell sentenced Walden to more than four years in prison on the charges and ordered him to pay $9.9 million in restitution.

Kirkpatrick, 67, of Stanford, also pleaded guilty in the case and was sentenced to four years in prison and ordered to pay more than $16 million in restitution. He was indicted in March.

Other farmers charged as part of the tobacco crop insurance fraud scheme include:

Another farmer, Harlan Ray Highfield, 63, of Brooksville, was sentenced earlier in December for another crop insurance fraud scheme in which he obtained policies under other names, according to Monday’s release. He received a sentence of more 3 1/2 years and was ordered to pay more than $1 million in restitution.

All the defendant are required to serve 85% of their sentences.

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