KY agriculture industry members sentenced for crop insurance fraud

Larry Walden, a Cave City farmer, was sentenced to 52 months of incarceration by U.S. District Judge Karen Caldwell. Walden pled guilty to conspiring to commit money laundering by committing crop insurance fraud.

Once released, Walden must complete three years of probation and pay almost $10 million in restitution.

Walden's plea agreement states that he owned and rented farmland in Barren County, Ky., on which he primarily grew burley tobacco. He maintained insurance on the tobacco crop from at least 2014 to 2023. From 2014 to 2019, Walden used the services of Farmers Tobacco Warehouse in Boyle County to falsify claims of loss on his crop insurance.

Walden wrote checks to FTW, making it appear that the tobacco he raised was sold and purchased from FTW. Conspiring with the manager of FTW, Thomas Kirkpatrick, Walden obtained fake receipts and copies of cancelled checks and subsequently presented them to his insurance adjuster.

The adjuster used the falsified documents to justify deflating Walden's production reports and increasing his indemnity payment. Walden paid off lines of credit and purchased new assets with the funds, according to a news release from the Justice Department.

In addition to the Barren County scheme, Walden admitted to running the same fraud scheme through Greensburg Tobacco Market, located in Greensburg, Ky., and Fair Deal Tobacco, located in Littleton, North Carolina. He also admitted to selling tobacco under the names of neighbors and relatives without reporting the information on his insurance claims.

According to the justice department, other farmers have also been sentenced for their role in the same conspiracy to commit crop insurance fraud and have been sentenced as follows:

Thomas Kirkpatrick, 67, of Stanford, Ky., the former manager of Farmers Tobacco Warehouse, was sentenced to 48 months in prison, two years of supervised release, and was ordered to pay $16,156,345 in restitution.David Hunt, 63, of Campbellsville, Ky., a farmer who obtained fake documentation from Kirkpatrick in order to support fraudulent claims to indemnity payments under an organic tobacco insurance coverage policy, was sentenced to 42 months in prison, three years of supervised release, and $5,427,365 in restitution.Terry Wilson, 67, an Edmonton, Ky, farmer who used Farmer Tobacco Warehouse to facilitate his fraud conspiracy, was sentenced to time served, followed by three years of supervised release, and was ordered to pay $667,679.00 in restitution.Christopher Wilson, 50, Terry Wilson's son, was sentenced to 18 months in prison, three years of supervised release, and was ordered to pay $669,447 in restitution.David Wisdom, 69, a Glasgow, Ky., farmer who used Farmer Tobacco Warehouse to facilitate his fraud conspiracy, was sentenced to 48 months, followed by three years of supervised release, and was ordered to pay $1,941,007 in restitution.Robert D. Birge, Jr., 51, a Summer Shade, Ky., farmer, was sentenced to six months in prison, three years of supervised release, and was ordered to pay $1,114,519 in restitution.

Each defendant must serve 85% of their prison sentence.

"These defendants fleeced programs intended to protect agricultural producers," said Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky, in the Justice Department's news release. "While the vast majority of farmers conduct themselves with great integrity, the sentences imposed in these cases should serve as a warning to any producers or warehouse operators considering similar crop insurance fraud."