Nebraska Farmer: $5.1M Judgment Too High

LINCOLN, Neb. (DTN) -- A Nebraska farmer sentenced to 36 months in prison for bank fraud and ordered to pay $5.1 million in restitution, asked a federal appeals court Thursday to force the lower court to reconsider the sentencing.

In a brief filed in the U.S. Court of Appeals for the Eighth Circuit, George Liakos, 64, of Gering, Nebraska, said the district court judge erred in setting the restitution amount.

Liakos was sentenced in late October after he pleaded guilty to one count of bank fraud. He had faced a grand jury indictment going back to October 2021 on four counts of bank fraud and one count of making a false statement. Liakos was ordered to pay restitution to First Interstate Bank.

"In making its final decision, the trial either failed or refused to consider Liakos' evidence on the valuation issue," Laikos' attorneys said in the brief.

"The court's failure to fairly consider such evidence was an abuse of discretion. The bank already has its money judgment which Liakos must contend with. The amount of the loss and restitution should be recalculated to give effect to the purposes of restitution and not reward the bank for its misconduct in the disposition of the collateral. That amount should not be more than $1 million."

Liakos argues the court "erred and/or abused its discretion" by not considering what he said was a "deficiency" in the bank's failure to consider the fair market value of Liakos' collateral.

Doing so, the brief said, would be enough to "satisfy debt" to the bank.

Beginning in April 2017 and continuing through May 2019, Liakos misrepresented the number of commodities he had in storage, cattle inventory, and crop acres.

In addition, Liakos concealed his debt from Great Western Bank to secure approximately $11 million in loans, according to the U.S. attorney's office in Nebraska.

"Liakos' evidence established that the fair market value of the real estate and improvements was more likely around $11 million," according to the brief filed this week.

"The loss and restitution amounts should be based upon that valuation. Liakos offered evidence that the real estate was worth substantially more than the $7.5 million the bank received and that was credited against the debt."

Liakos owned about 2,000 acres of farm ground, according to the brief, that he claims is worth at least $8.5 million.

"Liakos' complaint that the $7.5 million to $8 million credited the debt was unreasonable is supported by evidence," the brief said.

"It was not based upon a finger in the wind or wild speculation or guess. The bank should have recovered at least $10 million to $14 million for the real estate."

Great Western Bank, which was acquired by First Interstate Bank, was a banking corporation with locations in Iowa, Colorado, South Dakota and Nebraska, including a banking office in Scottsbluff, Nebraska. Great Western Bank's deposits were insured by the Federal Deposit Insurance Corporation.

Liakos conducted a farming operation in Bayard, Nebraska, primarily growing beans, corn and sugar beets as well as raising cattle.

To obtain money from Great Western Bank, on June 2, 2017, Liakos executed loans and a security agreement with the bank. The loans and security agreement consisted of a revolving line of credit, a machinery and equipment loan and a livestock loan.

In approving the loans and security agreement, Great Western Bank relied on information from Liakos reflecting current commodity and livestock inventory, accounts receivable, loans and accounts payable that he knew "materially overstated his commodity inventory and materially understated and failed to report loans and accounts payable," according to the U.S. attorney.

As a result of Liakos's scheme, Great Western Bank sustained a $3.9 million loss.

Read more on DTN:

"Nebraska Farmer Gets Prison on Bank Fraud," https://www.dtnpf.com/…

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

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