Michigan Farmer Wants Fraud Dismissed

LINCOLN, Neb. (DTN) -- Springport, Michigan, farmer Gaylord Lincoln this week asked a federal court to dismiss wire and mail fraud charges pending against him, alleging in a new motion that the evidence brought by the government falls short.

Lincoln was indicted by a grand jury in 2022 on 13 counts in connection with a federal investigation into alleged federal crop insurance and farm benefits fraud.

He was indicted in part for allegedly setting up so-called sham farming operations using the names of family members and farm employees to apply for and receive additional crop insurance benefits.

Lincoln said in a new motion filed in the U.S. District Court for the District of Eastern Michigan that what the government alleges does not meet the statutory definition of fraud.

"The government does not allege that insurance claims were submitted for losses that did not occur," Lincoln said in the motion to dismiss.

"The government does not allege that Mr. Lincoln obtained insurance policies on farm operations that did not exist. The crux of the government's claim is that others who bought the insurance policies did not disclose that Mr. Lincoln had an interest in the farming operations. If the government's theory that the so-called 'sham farms' were actually Mr. Lincoln's farms is correct, there is nothing that would have prevented Mr. Lincoln from purchasing policies in his name, paying the premiums and making claims on the policies in the same way that the so-called 'sham operators' did."

Lincoln's attorneys argue the government's theory of fraud that "the government didn't know everything it would have liked to know and therefore the following insurance claims were fraudulent" was not a valid theory of wire fraud.

Negotiations on a potential plea agreement have been ongoing, according to court documents and earlier this summer the court moved a trial date to September 2024.

Lincoln's attorneys argue that the activity alleged in the 2022 indictment could have been a "scheme to conceal" from the government the owner of the farm, but it was not a "scheme to defraud" the government of money or property.

"Beyond the identity of the true owner, the government does not appear to press deception or fraud," the motion said.

"And according to the government, Mr. Lincoln alone paid the going rate for the crop insurance policies and obtained the benefits when losses occurred. In order to proceed on the mail and wire fraud counts, the government needs to show that there was a scheme to defraud of money or property. They can't make that showing because the so-called 'sham farming' operations paid 'the going rate for a product' which 'does not square with the conventional understanding of 'deprive.'"

In December 2021, the U.S. government filed a complaint alleging Lincoln violated the False Claims Act by maintaining a "scheme to fraudulently" obtain more federal farm benefit program payments than he was entitled to receive, according to the U.S. attorney's office.

INDICTMENTS FROM GRAND JURY

In September 2022, a federal grand jury handed down indictments, including four counts for making a false statement to obtain crop insurance, five counts of wire fraud and four counts of mail fraud. That same month, U.S. attorneys dropped the lawsuit as part of a settlement agreement.

Lincoln's farm operates on land across four counties in south-central Michigan, including Calhoun, Eaton, Ingham and Jackson.

According to the indictment, from 2010 to 2019, Lincoln set up "sham farming operations" using the names of family members and farm employees. Lincoln then allegedly took out land leases on farmland using the names of the operators.

In crop insurance applications, acreage reports and loss claims, the indictment said the operators, at Lincoln's direction, allegedly "falsely asserted that they had a 100% share in the insured crops."

The indictment alleges the "sham farming operators" did not have a 100% share in the insured crops because they lacked financial risk in the production of those crops. The indictment alleges Lincoln handled almost all interactions with the crop insurance agency on behalf of the fake farm operators.

Read more on DTN:

"Michigan Farmer Trial Set in September," https://www.dtnpf.com/…

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

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