Michigan grain farmer cheated government out of more than $500,000 from fraudulent claims

A Southwest Michigan grain farmer has been sentenced to spend one year and one day in prison for cheating the federal government out of almost $525,000 "through fraudulent crop insurance claims and misuse of marketing assistance loans," Eric Freedman reports for Great Lakes Echo, a project of the journalism department at Michigan State University. Leonard 'Lenny' Kolberg Jr. was also "assessed $99,641 in restitution to the government, representing the unpaid loan balance." (Wikipedia map: Kolberg's farm is in Van Buren County, Michigan)

"Between 1995 and 2011, Kolberg received $642,298 in federal commodity and disaster subsidies, according to data compiled by the Environmental Working Group in Washington, D.C.," Freedman writes. "The nonprofit research organization reported that he collected subsidies primarily for corn but also for soybeans, wheat, dairy, livestock, barley, sorghum and oats in Mecosta, Cass, Isabella, Montcalm and Van Buren counties."

The nonprofit said that Kolberg, who farmed about 5,000 acres, including land leased from more than 75 property owners, owed about $3.5 million in loans to Fifth Third Bank and $2 million in equipment loans, leases and other farm loans, Freedman writes. "The indictment accused Kolberg, now 57, of misusing the proceeds from the sale of almost 34,000 bushels of corn that he had pledged to the government as security for 2008 marketing assistance loans."

"Marketing assistance loans from the Farm Services Agency such as the ones Kolberg received provide interim help to meet farmers’ cash flow needs during harvest season," Freedman writes. "That means farmers don’t have to sell their crops when market prices generally are low and assists with 'more orderly marketing of commodities during the year,' according to the plea agreement he signed. He admitted illegally keeping the money instead of repaying the government." (Read more)