OMAHA (DTN) — One of three men indicted on 14 counts of conspiracy to commit bank fraud and making false statements to attain loans and crop insurance for Decatur, Michigan-based Stamp Farms LLC, has reached a plea agreement, according to court documents filed in the U.S. District Court for the District of Western Michigan.
James Leonard Becraft Jr. agreed to plead guilty to conspiracy to make false statements to the Federal Crop Insurance Corp. A change of plea hearing is set for Aug. 3 in Grand Rapids, Michigan. Jury selection and the trial is set to begin on Jan. 23, 2019.
On Dec. 13, 2017, a grand jury handed down an indictment of Becraft, Michael Stamp and Douglas Edward Diekman in connection with the Stamp Farms Chapter 11 bankruptcy filed in November 2012. The bank found Stamp Farms in noncompliance on loan agreements, including working capital and other ratios. Michael Stamp is the former owner of the farm.
Stamp and Becraft originally pled not guilty in January, according to court records, after being arrested by Internal Revenue Service agents on Jan. 18. According to the indictment, the losses alleged in the fraud total about $60.5 million.
According to the plea agreement, Becraft could face five years in prison, three years of supervised release, and pay about $2.7 million in restitution as well as a $250,000 fine.
In addition, the agreement said Becraft agreed to cooperate with federal authorities on the investigation into Stamp Farms.
“The defendant’s cooperation will consist of all steps needed to uncover and prosecute such crimes, including but not limited to, providing investigators with a full, complete and truthful statements concerning the defendant’s knowledge of any and all criminal activity of which he is aware,” the agreement said.
In return, the U.S. Attorney’s office agrees not to oppose Becraft’s request for a reduction in the charges. Also, Becraft will not be charged with bank fraud and conspiracy to commit bank fraud.
STAMP FARMS BANKRUPTCY
According to court documents in Stamp’s individual bankruptcy case, Wells Fargo claimed it had made a $68 million loan in December 2011 based on representations that Stamp Farms and its affiliates farmed 46,000 acres. Audits later could uncover only about 27,000 acres, the bank claimed.
Stamp Farms’ assets eventually were auctioned off to Dennis Boersen, the owner of Zeeland, Michigan-based Boersen Farms. Boersen Farms has also faced financial difficulties.
The indictment said Stamp rapidly increased the number of acres the company farmed by acquiring agricultural land leases from landowners in southwest Michigan, “often by paying above-market rates.”
Over the years, Stamp relied on “large” operating loans and credit agreements. In addition, the indictment said Stamp used crop insurance payments to pay for some of his operation, including covering lease payments.
Starting in 2011, Stamp needed money to keep his farm going and to pay off an outstanding loan. Between March and December, Stamp provided false information to obtain about $68 million in credit from Wells Fargo by misrepresenting the amount of land he farmed and the value of his farming assets, the grand jury said.
According to the indictment, when the bank extended his credit, Stamp continued to provide false information about his operation. In addition, Stamp submitted false claims to the Federal Crop Insurance Corporation in order to get crop insurance payments.
Stamp conspired with Becraft and Diekman, in particular, to “defraud the Federal Crop Insurance Corporation and its reinsurers,” the indictment said.
STAMP’S WIFE JAILED
In June 2015, Stamp’s wife, Melissa Stamp, was sentenced to 20 months in jail and 20 months of supervised release, and was also required to pay $184,500 in restitution and had to forfeit $151,915 as part of a plea agreement with federal authorities for her role in bankruptcy fraud.
According to a news release from the U.S. Department of Justice, at the time of her guilty plea, Melissa Stamp admitted to giving $75,000 to her brother and about $90,000 to her father to conceal the money from a bankruptcy case that was filed one month later by her husband. She also admitted to concealing $50,000 in a safe in her home, according to DOJ, but none of the money was disclosed to the bankruptcy court.
The farm and its related businesses at the time of the bankruptcy claimed assets valued at $131 million and a net worth of $39 million. An audit found those assets dwindled to about $93 million in a matter of months.
The case left southwestern Michigan landowners and creditors jolted by what legal experts believe was, at the time, the largest grain farm bankruptcy in U.S. history. Top Producer magazine had featured the farm and Michael Stamp on the November 2012 cover as one of the publication’s top producers of the year — the same month Stamp filed for bankruptcy.
Stamp owned a number of related businesses that were part of the farm bankruptcy case. They include a custom farming operation, a trucking business, an excavating operation and a grain elevator, Northstar Grain LLC, which has a reported 4.2 million bushels of grain capacity.
While southwest Michigan was hit hard by drought in 2012, it is unclear what actually led to Stamp Farms’ downfall in what was an era of booming commodity prices.
According to USDA, corn yields slipped statewide in 2012, falling from an average yield of 153 bushels an acre (bpa) in 2011 to about 118 bpa last year. Ironically, one of Stamp’s affiliated farms placed third in the Michigan Corn Growers Association yield contest with a dryland yield of 259.9 bushels.