Iowa Farmer Awaiting Sentence is Fined

LINCOLN, Neb. (DTN) -- A Clayton County, Iowa, farmer awaiting sentencing on livestock theft, wire fraud and other charges has been fined by the state of Iowa for an alleged environmental violation at a feedlot he operates.

Michael Wayne Butikofer from Monona, Iowa, was fined $4,000 for a water quality violation, according to an administrative order issued by the Iowa Department of Natural Resources.

State officials found a manure stockpile at the 1,700-cattle open lot was within 400 feet of an onsite well. According to the order the feedlot has two basins, one designed to overflow into an effluent basin.

During an inspection an investigator reported seeing material overtopping the second basin and was "traveling across the ground to a letdown drain, overland through a ravine, and to a field tile inlet."

A test of the field tile, according to the order, "indicated the strong presence of nitrogen ammonia." The investigator told Butikofer that since his facility is a large, concentrated animal feeding operation without an NPDES (National Pollution Discharge Elimination System) permit that he "must either immediately remove the potential to discharge to Howard Creek or apply for an NPDES permit."

State officials also found bedding stockpiled on a concrete slab outside of a confinement structure on the lot that was within 400 feet of a sinkhole.

Butikofer's feedlot has a history of "manure control issues," according to the state. Butikofer was ordered to remedy the violations including reducing capacity at the lot to below 300 head, apply for an NPDES permit or to remove the discharge potential.

Butikofer could face up to 30 years in prison after pleading guilty Dec. 1, 2023, to livestock theft, wire fraud and one count of making a false bankruptcy declaration while operating the unlicensed custom-cattle farm known as "Fawn Hollow."

According to court records from the U.S. District Court for the District of Northern Iowa, Butikofer is scheduled for sentencing Oct. 10, 2024.

In Butikofer's plea agreement, he admitted to operating a large farming operation in northeastern Iowa and at satellite locations elsewhere in Iowa and Wisconsin. Butikofer operated a custom-cattle feeding operation in which his employees raised and cared for cattle owned by other farmers and investors across the country.

SELLING OFF CATTLE

Fawn Hollow then sold the cattle primarily to a Wisconsin slaughterhouse.

According to court records, neither Butikofer nor Fawn Hollow was registered with USDA under the Packers and Stockyards Act of 1921.

Between July 2020 and February 2022, Butikofer converted the proceeds of cattle sales owned by six cattle investors for his use. According to the U.S. attorney's office, Butikofer convinced the cattle investors to allow him to sell the cattle in his name.

When he sold the cattle to a Wisconsin slaughterhouse, Butikofer falsely represented to the slaughterhouse that he had "good and merchantable title" to the cattle when he did not actually own the cattle.

COVID-19 FUNDS FRAUD

Between July and August 2020, Butikofer defrauded USDA of more than $200,000 in emergency assistance funds designed to assist livestock producers during the COVID-19 pandemic.

Specifically, applications were submitted in the name of an unnamed employee at Fawn Hollow and entitled "Coronavirus Food Assistance Program" (CFAP) payments.

A cattle producer qualified for CFAP payments on a per-head basis, based on the producer's owned inventory of eligible beef cattle on a date selected by the producer between certain dates in 2020.

It was part of Butikofer's wire fraud scheme that the CFAP applications falsely stated that an employee owned the cattle.

Butikofer received more than $1.5 million from the Small Business Administration as part of an application for an economic injury disaster loan in February 2022.

BANKRUPTCY STATEMENT

In March 2022, Butikofer submitted a false and fraudulent statement of financial affairs in his bankruptcy case, according to court documents.

In April 2022, the U.S. attorney's office said the farmer falsely testified under oath at a meeting of creditors and, in November 2022, "repeatedly committed perjury" before the bankruptcy court when asked questions about the ownership of his cattle operation.

From April to November 2023, according to the U.S. attorney, while on federal pretrial release Butikofer recruited and caused an employee to recruit H-2A workers to the U.S. under "false and fraudulent pretenses, representations and promises."

Under the U.S. Immigration and Nationality Act, temporary, nonimmigrant workers, known as H-2A workers, perform agricultural labor or services of a temporary or seasonal nature.

According to an Oct. 26, 2023, indictment, the false and fraudulent pretenses, representations and promises included the housing conditions provided to employees; location of the employees' work; terms and timing of reimbursement for the employees' work and expenses; and payment for injuries sustained during employment.

In 2020, a federal district court entered a default judgment against Butikofer and in favor of H-2A workers from the Republic of South Africa for civil violations of the Fair Labor Standards Act and Trafficking Victims Protective Reauthorization Act in 2018.

As part of his plea agreement, Butikofer agreed to voluntarily terminate and cease participation in foreign labor programs for any program administered by the U.S. Department of Labor or U.S. Department of Homeland Security.

Read more on DTN: "Farmer Faces 30 Years for Fraud, Theft," https://www.dtnpf.com/…

Todd Neeley can be reached at todd.neeley@dtn.com

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