Former Danville tobacco manager to pay $16M for crop insurance fraud

The former manager of a Kentucky tobacco warehouse agreed to pay at least $16 million to the federal government over fraudulent crop insurance claims.

Thomas H. Kirkpatrick pleaded guilty Friday to a charge of conspiracy to commit money laundering when he provided paperwork that helped farmers commit fraud against the federal crop insurance program, court documents say.

He originally faced five charges, including conspiracy to commit fraud involving crop insurance, but those were dismissed as part of the plea agreement.

According to court documents, Kirkpatrick was manager at Farmers Tobacco Warehouse in Danville from 2016 to 2020.

The warehouse has since closed.

According to court documents, Kirkpatrick on several occasions gave checks to farmers that purported to show they had bought burley tobacco from the warehouse even though they hadn’t.

Kirkpatrick reimbursed the farmers for the checks, minus a fee for himself, and the farmers used the checks in insurance claims to show their crops were short and they needed to buy the leaf to fulfill their production contracts.

In one example cited in the indictment, Kirkpatrick allegedly received five checks totaling $763,434 from a farmer named Larry Walden in February 2020, as evidence that Walden had bought 479,704 pounds of tobacco from the warehouse.

Walden pleaded guilty to one charge of conspiracy to commit money laundering in May and was ordered to pay $9.9 million in restitution.

Walden admitted he wrote checks to Farmers Tobacco Warehouse in Danville to show he had bought tobacco from the warehouse, even though he hadn’t.

Walden has not been sentenced, but faces up to 20 years in prison.

In addition to restitution, Kirkpatrick faces up to 20 years in prison and three years of supervised release. A sentencing hearing has not been scheduled.

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