FRANKFORT, Ky. – A wide net cast by the USDA and the FBI has landed six Kentucky farmers and a warehouse manager in prison for their long-running tobacco crop insurance fraud scheme. The tobacco scheme made it appear that farmers suffered losses on their crops from 2014 to 2023.

“These defendants fleeced programs intended to protect agricultural producers,” Paul McCaffrey, first assistant U.S. attorney for the Eastern District of Kentucky, said in a statement. “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.”

Larry Walden, a 69-year-old farmer from Cave City, was sentenced to four years in prison after he pleaded guilty to money laundering and crop insurance fraud. The federal judge ordered him to pay nearly $10 million in restitution to the crop insurance program.

According to his plea agreement, Walden owned and rented farmland in Barren County, on which he grew burley tobacco. 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 his conspiracy, Walden wrote checks to Farmers Tobacco Warehouse to make it appear as though the tobacco he raised and sold was purchased from Farmers Tobacco Warehouse.

Thomas Kirkpatrick, 67, of Stanford, is the former manager of Farmers Tobacco Warehouse and conspired with Walden. Kirkpatrick was sentenced to 48 months in prison, two years of supervised release, and order to pay $16 million in restitution.

Conspiring with Kirkpatrick, Walden also received fake receipts in further attempts to conceal the scheme.

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

Walden also admitted to running the same fraud scheme through Greensburg Tobacco Market and Fair Deal Tobacco, located in Greensburg, Ky., and Littleton, N.C., respectively. He further sold tobacco under the names of neighbors and relatives without reporting that production on his insurance claims.

In total, Walden’s fraud caused $9.96 million in loss to crop insurers. Upon his release, Walden will be under the supervision of the U.S. Probation Office for three years, and is ordered to pay back the full amount.

Five others have been sentenced in connection with the tobacco scheme.

Robert D. Birge, Jr., 51, a Summer Shade farmer, was sentenced to six months in prison, three years of supervised release, and ordered to pay $1.1 million in restitution.

David Hunt, 63, of Campbellsville, 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 $5.4 million in restitution.

Terry Wilson, 67, of Edmonton, a 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 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, of Glasglow, who used Farmer Tobacco Warehouse to facilitate his fraud conspiracy, was sentenced to 48 months in prison, followed by three years of supervised release, and was ordered to pay $1.9 million in restitution.

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

“There is no place in our society for opportunists to choose to defraud public programs at the expense of honest, hard-working American farmers,” said Olivia Olson, special agent in charge at the FBI Louisville Field Office. “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.”

The USDA estimates fraudulent activity as only 0.18 percent of insured farmers.