Conviction of Iowa farmer upheld
Lying and converting property is never a good thing to do. It is especially a bad idea to do it against the interests of the federal government as one Iowa farmer has discovered.
In early 2000, the farmer applied for a loan from the Farm Service Agency (FSA). His initial loan application was denied, but later approved upon reconsideration. As part of the renewed loan application, the farmer submitted a “farm and home plan” to FSA in July of 2000 in which he detailed his assets, debts, crop plans for 2000, and anticipated income and debt repayment plan. To get the loan, the farmer also pledged to FSA, among other items, the proceeds from some of his 2000 soybean crop. The loan closed in October of 2000 and, at that time, the farmer advised FSA that his financial circumstances “had not materially changed” since the farm and home plan had been submitted in July.
That’s where problems began. The loan proceeds were placed in a supervised account and could only be withdrawn with FSA’s written approval. The farmer did withdraw a substantial portion of the loan proceeds from the account with FSA’s approval, but later tried to withdraw the remaining balance on his own. The bank denied the withdrawal, telling the farmer he needed FSA’s approval. However, the farmer went to a branch bank in a different town and withdrew the remaining funds in the account. That conduct got the farmer charged with converting property pledged to FSA - a violation of federal law. Also, it was discovered that the farmer had already sold $11,000 worth of his 2000 soybean crop just before the loan closed and he stated that his financial circumstances had not materially changed. That brought another federal charge - making a false statement to the government.
The jury convicted him on both counts. They believed that he knew his statement was false and that it was a material change to his financial condition - FSA wouldn’t have made the loan had they known that some of the soybeans had already been sold. The jury also believed that the farmer knowingly converted the funds that he had pledged to the FSA with the intent to defraud the agency. He had made prior withdrawals with FSA’s approval, went to a different branch to get the funds without FSA’s approval, and then refused to return the funds to the account upon FSA’s request.
The United States Court of Appeals for the Eighth Circuit affirmed the conviction. There was sufficient evidence to support the jury’s verdict. The appellate court also rejected the farmer’s claim that his legal counsel was ineffective at trial. The sentence - restitution and 60 months’ probation on each count, to be served concurrently. United States v. Rice, No. 05-3417, 2006 U.S. App. LEXIS 13319 (8th Cir. May 30, 2006).
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