(LEX 18) — A Cave City farmer was sentenced to more than four years in federal prison for his role in a massive crop insurance fraud scheme that cost insurers nearly $10 million, a news release reported.
The U.S. Attorney's Office Eastern District of Kentucky reported that 69-year-old Larry Walden received a 52-month prison sentence from U.S. District Judge Karen Caldwell after pleading guilty to conspiring to commit money laundering through crop insurance fraud.
The scheme ran from 2014 to 2023 and involved multiple tobacco warehouses across Kentucky and North Carolina, the release read.
Walden owned and rented farmland in Barren County where he grew burley tobacco and other crops. He maintained insurance coverage on his tobacco crop throughout the fraud period, according to the release.
According to court documents, Walden worked with Thomas Kirkpatrick, manager at Farmers Tobacco Warehouse in Boyle County, to create false documentation supporting fraudulent insurance claims.
Walden reportedly wrote checks to the warehouse to make it appear he purchased tobacco that he actually grew and sold himself.
"Walden presented copies of these canceled checks along with fake purchase receipts to his insurance adjuster," court records show. The adjuster used this paperwork to justify deflating Walden's production reports, which increased his insurance payouts.
Walden used the fraudulent proceeds to pay off credit lines and purchase new assets, the release reported. He also ran similar schemes through Greensburg Tobacco Market and Fair Deal Tobacco in Greensburg, Kentucky, and Littleton, North Carolina.
The farmer sold tobacco under neighbors' and relatives' names without reporting that production on his insurance claims.
Walden must serve 85% of his sentence under federal law and will face three years of supervised release. He was also ordered to pay $9,960,817.19 in restitution.
Seven other defendants sentenced
Walden was among eight defendants sentenced in the conspiracy:
- 67-year-old Thomas Kirkpatrick of Stanford received 48 months in prison and he must pay $16,156,345 in restitution. As the former Farmers Tobacco Warehouse manager, Kirkpatrick facilitated the fraud scheme for multiple farmers.
- 63-year-old David Hunt of Campbellsville was sentenced to 42 months in prison and ordered to pay $5,427,365 in restitution. Hunt obtained fake documentation from Kirkpatrick to support fraudulent organic tobacco insurance claims.
- 67-year-old Terry Wilson of Edmonton received time served plus three years of supervised release and must pay $667,679 in restitution.
- 50-year-old Christopher Wilson, Terry Wilson's son, was sentenced to 18 months in prison and ordered to pay $669,447 in restitution.
- 69-year-old David Wisdom of Glasgow received 48 months in prison and must pay $1,941,007 in restitution.
- 51-year-old Robert D. Birge Jr. of Summer Shade was sentenced to six months in prison and ordered to pay $1,114,519 in restitution.
- 63-year-old Harlan Ray Highfield of Brooksville received 42 months in prison and must pay $1,060,460 in restitution for a separate crop insurance fraud scheme involving policies in nominee names.
"These defendants fleeced programs intended to protect agricultural producers," said Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky.
McCaffrey said the sentences should warn other producers and warehouse operators considering similar fraud.
Special Agent in Charge Olivia Olson of the FBI Louisville Field Office said there is no place for those who defraud public programs at honest farmers' expense.
"This case is a prime example of law enforcement partners collaborating over a number of years to ensure the conspirators are identified and penalized appropriately, while simultaneously working to protect one of our nation's most vital industries," Olson said.
