A large-scale insurance fraud investigation of Farmers Tobacco Warehouse in Danville, Kentucky, came to a close with the sentencing of seven farmers and a tobacco warehouse manager, according to an announcement by the U.S. Attorney’s Office, Eastern District of Kentucky.

Larry Walden­­­, 69, was sentenced to 52 months’ incarceration after pleading guilty to conspiring to commit money laundering and committing crop insurance fraud.

According to his plea agreement, Walden owned and rented farmland in Barren County, on which he grew burley tobacco, among other crops. He maintained insurance coverage over his tobacco crop from at least 2014 to 2023.

For Crop Years 2014 through 2019, Walden used services offered at Farmers Tobacco Warehouse in Boyle County to obtain false documentation to support false claims of loss on his crop insurance.

As part of the conspiracy, Walden wrote checks to Farmers Tobacco Warehouse to make it appear that the tobacco he raised and sold was actually purchased from them. Conspiring with Thomas Kirkpatrick, manager at Farmers Tobacco Warehouse, Walden also received fake receipts to conceal the scheme.

Walden presented copies of the cancelled checks along with fake purchase receipts to his insurance adjuster, who used this paperwork to justify deflating Walden’s production reports, thereby increasing his indemnity payment. With the proceeds, Walden paid off lines of credit and purchased new assets.

He admitted to running the same fraud scheme through Greensburg Tobacco Market and Fair Deal Tobacco, located in Greensburg, Kentucky, and Littleton, North Carolina.

He also sold tobacco under the names of neighbors and relatives without reporting that production on his insurance claims.

In total, Walden’s fraud caused $9,960,817.19 in losses to crop insurers.

Upon his release, Walden will serve three years’ probation. In addition to his prison sentence, Walden was ordered to pay $9,960,817.19 in restitution.

Other farmers have also been sentenced for their role in the same conspiracy to commit crop insurance fraud.

• Thomas Kirkpatrick, 67, of Stanford, Kentucky, 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, Kentucky, a farmer who obtained fake documentation from Kirkpatrick 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, Kentucky, 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 Glasglow, Kentucky, 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, Kentucky, farmer, was sentenced to 6 months in prison, three years of supervised release, and was ordered to pay $1,114,519 in restitution.

Earlier this month, Harlan Ray Highfield, 63, of Brooksville, Kentucky, was sentenced to 42 months’ incarceration, stemming from his crop insurance fraud scheme that involved obtaining crop insurance policies in nominee names, among other offenses. He was sentenced to three years’ supervised release and was ordered to pay $1,060,460 in restitution.

Under federal law, defendants must serve 85 percent of their prison sentences.

“These defendants fleeced programs intended to protect agricultural producers,” said Paul McCaffrey, First Assistant United States Attorney for the Eastern District of Kentucky. “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.”

The investigation was conducted by the United States Department of Agriculture Office of Inspector General, United States Department of Agriculture Risk Management Agency Special Investigations Staff, Federal Bureau of Investigation, Internal Revenue Service-Criminal Investigation. The United States was represented by Assistant U.S. Attorneys Kate Dieruf and Andrea Mattingly Williams.