OMAHA (DTN) -- Decatur, Michigan, farmer Michael Stamp was sentenced to eight years in prison and ordered to pay $23 million in restitution on Tuesday, as part of a plea agreement reached with federal investigators on charges of bank fraud and conspiracy to make false statements to the Federal Crop Insurance Corp.
Once released from prison, Stamp will be on supervised release for five years, according to the sentencing document filed in the U.S. District Court for the District of Western Michigan in Kalamazoo.
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.
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.
"Stamp claims he is a farmer to the core," prosecutors said in a sentencing memorandum filed this week. "But the people he hurt most were farmers. His sentencing memorandum seems to blame a drought in 2012 for causing him to 'lose his judgment' and commit crimes. This ignores that he defrauded Wells Fargo in December 2011 and early 2012, well before the drought, not to mention the fact that most of his land was irrigated and thus unaffected by it."
In his sentencing memo filed with the court, Michael Stamp said when he "speaks of his life, one hears almost immediately of this vocation that defines Mike in so many ways."
Stamp's memo said he "faced insecurity" and "pressure" to continue growing his farming operation, and because of "natural disaster conditions of varying degrees," Stamp's judgment "failed" him.
"Though he never intended to steal money, though he worked extremely hard to make a living, though he always intended with the money at issue to simply keep the farm afloat, his staff employed, and his family cared for, Mike still broke the law," the memo said.
Prosecutors said in their memo Stamp "preyed" on the southwest Michigan farming community.
"In the process he ruined lives and careers and left a scar that will take years to heal," prosecutors said.
"He forged scores of contracts, invoices, and lease agreements to make his business look more profitable to lenders using -- without their knowledge -- the names and businesses of his Southwest Michigan neighbors: local farmers, business associates, and even his dying father. He used his fraudulently obtained lines of credit to overpay for land rent, which artificially inflated costs and pushed smaller farmers out of the market -- something that impacts the community to this day."
COURT DRAMA PLAYED OUT
Michael and Melissa Stamp's 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 was required to pay restitution for her role in alleged bankruptcy fraud.
As part of Michael Stamp's sentencing this week, prosecutors dropped additional charges pending against Melissa Stamp.
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.
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 of that year, 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.
Todd Neeley can be reached at email@example.com
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