Justia White Collar Crime Opinion SummariesArticles Posted in Agriculture Law
United States v. Edington
In March 2012, Edington and his father agreed Edington would apply for a Farm Services Agency (FSA) farm operating loan and list assets belonging to his father as collateral. Edington listed as collateral many assets he did not own. In 2012, Edington also presented documents to the FSA falsely claiming he had purchased cattle from his friend. Edington defaulted on the loans; his father died. Edington did not inherit the assets listed in the security agreement. In 2019, the U.S. Attorney’s Office filed felony charges for conspiring to violate 18 U.S.C. 1014, which prohibits: “knowingly make a false statement or report . . . for the purpose of influencing in any way the action of the” FSA. The district court dismissed, citing the five-year statute of limitations under 18 U.S.C. 3282(a).The Sixth Circuit reversed and remanded; 18 U.S.C. 3293(1) expressly provides a 10-year limitations period for certain offenses including “a violation of, or a conspiracy to violate . . . section . . . 1014.” Section 3293 extends the statute of limitations from five to 10 years for certain crimes including a violation of and conspiracy to violate section 1014. The most recent alleged overt acts listed in the information occurred in 2012; the charges were timely. View "United States v. Edington" on Justia Law
West Hills Farms, LLC v. ClassicStar Farms, Inc.
In 1990 Plummer, a recognized expert in horse-breeding and the tax consequences of related investments, created the Mare Lease Program to enable investors to participate in his horse-breeding business and take advantage of tax code provision classification of horse-breeding investments as farming expenses, with a five-year net operating loss carryback period instead of the typical two years, 26 U.S.C. 172(b)(1)(G). Plummer’s investors would lease a mare, which would be paired with a stallion, and investors could sell resulting foals, deducting the amount of the initial investment while realizing the gain from owning a thoroughbred foal. If they kept foals for at least two years, the sale qualified for the long-term capital gains tax rate, 26 U.S.C. 1231(b)(3)(A). Between 2001 and 2005, the Program generated more than $600 million. Law and accounting firms hired by defendants purportedly vetted the Program. Plummer and other defendants began funneling Program funds into an oil-and-gas lease scheme. It was later discovered that the Program’s assets were substantially overvalued or nonexistent. Investors sued under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c), also alleging fraud and breach of contract. The district court granted summary judgment and awarded $49.4 million with prejudgment interest of $15.6 million. The Sixth Circuit affirmed, stating that there was no genuine dispute over any material facts. View "West Hills Farms, LLC v. ClassicStar Farms, Inc." on Justia Law
United States v. Peugh
In 1996 defendant and his cousin formed companies that bought, stored, and sold grain, and provided farming services. In 1999, the cousins obtained bank loan by falsely representing that valuable contracts existed for future grain deliveries from one company to the other and inflating balances of bank accounts by writing bad checks between accounts. Charged with loan fraud and check-kiting (18 U.S.C. 1344) that cost the bank more than $2.5 million, the cousin pled guilty. Defendant testified that the transactions were in good faith, but was convicted and sentenced to 70 months in prison and restitution in the amount of $1,967,055.30, the outstanding balance on the loans. The Seventh Circuit affirmed, rejecting arguments that the indictment was multiplicitous; that there was insufficient evidence of guilt beyond a reasonable doubt; that sentencing under 2009 guidelines violated the ex post facto clause; that loss and restitution amounts were miscalculated; that an enhancement for obstruction of justice was improper; and that the disparity between defendant’s sentence and that of his cousin was improper.View "United States v. Peugh" on Justia Law