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Dealer, Managers Sentenced
Wednesday, February 15, 2023 4:55PM CDT
Dealer, Managers Sentenced 02/15 16:55
Prison Sentences, Fines Handed Down in Iowa Company's Scheme to Defraud Hog
Farmers
An Iowa livestock company and four managers were sentenced in federal court
after pleading guilty to conspiracy charges in a scheme to defraud hog farmers.
Todd Neeley
DTN Staff Reporter
LINCOLN, Neb. (DTN) -- An Iowa livestock company and four managers were
sentenced in federal court for their roles in a scheme that led to at least $3
million in losses for hog farmers, caused by downgrading animal weights and
quality classifications at buying stations across the Midwest.
Lynch Family Companies, Inc., Waucoma, Iowa, pled guilty last summer to one
count of failing to comply with an order of the secretary of agriculture.
Last week the U.S. District Court for the District of Northern Iowa
sentenced the company to a five-year probation period, fined $196,000 and was
ordered to pay more than $3 million in restitution to livestock producers and
farmers.
Four company managers also were sentenced in the scheme that spanned nearly
two decades, after they pled guilty to conspiracy charges.
Billie Joe Wickham, 51, Waucoma, was sentenced to six months in prison and
fined $3,000 on one count of conspiracy to defraud the U.S. Wickham also
received a three-year term of supervised release after the prison term.
Charlie Lynch, 65, Fort Atkinson, Iowa, was sentenced to five years'
probation and fined $3,000 on one count of conspiracy to defraud the U.S.
Leland Blue, 60, Fredericksburg, Iowa, received five years' probation and
fined $1,000 on one count of conspiracy to defraud the U.S.
Tyler Thoms, 31, Fayette, Iowa, was sentenced to one year probation on one
count of causing a livestock dealer to keep inaccurate accounts and records.
According to a news release from the U.S. attorney's office for the northern
district of Iowa, the scheme began in the early 2000s and continued through at
least March 2017.
Lynch Livestock's second-ranking official directed other managers and
employees to "falsely reduce and downgrade the numbers" on quality
classifications and weights of swine delivered to Lynch's buying stations.
"These practices largely concerned large, corporate swine producers who
brought their swine for sale to Lynch Livestock," the U.S. attorney said in a
news release.
"To effectuate the fraud, managers at Lynch Livestock's headquarters created
false and fraudulent scale tickets bearing the initials of the managers at the
buying stations. By falsifying the producers' accounts of purchase, Lynch
Livestock and its managers created false and fraudulent invoices to pay less
than what was due and owing to those producers. Lynch Livestock managers and
employees then routinely shredded and burned evidence of the fraud and document
destruction was a routine practice of the company and a specific response when
it was anticipated that USDA officials were investigating the company's
practices."
In a statement to DTN, Lynch Family Companies Chairman Gary Lynch said the
company has taken responsibility and is ready to close a "painful" chapter in
the company's history.
"Our company is built on a strong foundation of integrity and trust, which
is essential to our relationship with our customers," Lynch said.
In 2017, Lynch Livestock and the USDA entered an administrative consent
decision in which the company agreed to pay nearly $800,000 in restitution to
two of its corporate customers because of fraud committed at two Iowa buying
stations.
In its plea agreement, Lynch Livestock agreed the amount of loss from the
fraud prior to 2018 was not isolated to the two corporate customers or two
buying stations, the U.S. attorney said.
"Between about 2018 and March 2021, Lynch Livestock's managers and employees
used a crowbar or other similar object to manipulate the scales on which
livestock producers' swine was weighed at its buying stations," the U.S.
attorney said.
"As a result, Lynch Livestock created, kept and provided to livestock
producers scale tickets that contained false information because they
understated the actual weight of the swine."
As a result, Lynch Livestock paid producers less than what was owed to them
and violated the 2017 consent decision with the USDA. In 2021, Lynch Livestock
and the USDA entered a second administrative consent decision that Lynch
Livestock agreed to pay more than $400,000 in restitution to various farmers
and producers.
According to the U.S. attorney, Wickham reported directly to the company's
second-ranking official and participated in the fraud for more than 15 years.
"Wickham also had a leadership role in the conspiracy, directing other
employees to stamp fraudulent scale tickets and to manipulate the sorting of
swine to lower the values for producers," the U.S. attorney said.
"Charlie Lynch was involved in sow procurement and marketing for Lynch
Livestock and from no later than 2013 until about 2017, reduced classifications
on sows that producers sold to Lynch Livestock."
The U.S. attorney said Blue managed Lynch Livestock's sow inventory and
joined the scheme in 2012. Thoms initially worked as a bookkeeper in Lynch
Livestock's headquarters with Wickham, Lynch and Blue. From 2018 to 2021, Thoms
managed Lynch Livestock's buying station in Waucoma.
"While working in the headquarters building as a bookkeeper, Thoms
participated in forging scale tickets and then as a manager used a crowbar to
lift up on a scale to cheat producers," the U.S. attorney said in a news
release.
Todd Neeley can be reached at todd.neeley@dtn.com
Follow him on Twitter @DTNeeley
(c) Copyright 2023 DTN, LLC. All rights reserved.
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