OMAHA (DTN) -- Despite reaching plea agreements on felony charges in April 2019 connected to a Chapter 11 bankruptcy, farmers Michael and Melissa Stamp of Decatur, Michigan, may be going to trial after all following an unexpected turn of events in a federal court.
The Stamps' legal cases have been tied up in court since they filed bankruptcy on their farm operation in late 2012. At one time, the couple's farming operation encompassed a reported 27,000 acres, though they were accused of claiming even larger acreage to secure operating loans.
Michael Stamp originally pled guilty to conspiracy to commit bank fraud and providing false statements.
Melissa Stamp pled guilty in federal court in June 2015 to misprision of felony -- failure to report a crime to authorities and potentially helping conceal it. She was sentenced to 20 months in jail, 20 months of supervised release and required to pay restitution for her role in alleged bankruptcy fraud.
On Dec. 13, 2017, a federal grand jury handed down an indictment of Michael Stamp and two other men 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.
On Jan. 23, 2020, however, U.S. District Judge Paul L. Maloney in the U.S. District of Western Michigan rejected Michael Stamp's plea agreement to accept up to five years in prison, because of a disparity with sentencing guidelines.
According to the judge's notice of possible rejection announced in January, sentencing guidelines set the range at between 12.6 years to 15.7 years.
According to a court document filed by the attorneys for the United States, federal prosecutors asked the court also to reject Melissa Stamp's plea agreement because it was contingent upon Michael Stamp's guilty plea.
"The government therefore seeks to withdraw from that plea agreement," the U.S. said in court filings.
In addition, U.S. attorneys said in a court document Melissa Stamp has not cooperated with authorities on the investigation of Michael Stamp. "The keys to Ms. Stamp's future are largely in her own hands," the government said in a court document.
"She continues to refuse to honor the cooperation plea agreement she signed to resolve (the case). As recently as Jan. 30, 2020, the government was informed that Ms. Stamp continues to refuse to cooperate in this case. Since Ms. Stamp cosigned the bank loans, was the former office manager of Stamp Farms, and conspired with Mike to commit bank, crop insurance, and bankruptcy fraud, it would be logical for jurors to question her role if she is neither a defendant nor a cooperator."
An attorney for Melissa Stamp asked the court on Jan. 30, 2020, to enforce her plea agreement.
"The reasons that the court articulated for rejecting Michael Stamp's plea agreement do not apply to Melissa," in a request to the court.
"Rather, as set forth in her sentencing memorandum, Melissa has already been adequately punished for her wrongdoing through the sentence she has already served for the same underlying conduct. Melissa Stamp does not believe that she has breached the agreement in this case. Rather, she has fulfilled her end of the agreement by pleading guilty."
DTN reached out the Stamps' attorneys for comment, but did not receive an immediate response.
According to the December 2017 indictment, the losses alleged in the fraud total about $60.5 million.
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.
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 allegedly 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 allegedly continued to provide false information about his operation. In addition, Stamp allegedly submitted false claims to the Federal Crop Insurance Corporation in order to get crop insurance payments.
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 in November 2012 by her husband. She also admitted to concealing $40,000 in a safe in her home, according to DOJ, but none of the money was disclosed to the bankruptcy court.
The Stamp Farms bankruptcy 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.
Todd Neeley can be reached at firstname.lastname@example.org
Follow him on Twitter @toddneeleyDTN
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