Farmer Faces Prison for Loan Fraud

Minnesota Farmer Guilty of Selling Soybeans Used as CCC Loan Collateral

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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Selling soybeans that had been pledged as collateral for a USDA loan led to a Minnesota farmer facing a year in prison. Because of the soybean loan and other loans that had collateral pledged, the farmer also will face $435,517.78 in restitution. (DTN file photo)

OMAHA (DTN) -- A Minnesota farmer has been sentenced to 12 months in prison and three years of supervised release and required to pay $435,517.78 in restitution for selling soybeans that had been used as collateral on Farm Service Agency loans.

Mark Alan Engelkes, 54, of Slayton, Minnesota, had pleaded guilty last October on one count of conversion of USDA Commodity Credit Corp. Crops and was sentenced on April 1 before a U.S. District Court judge in Minnesota.

Engelkes initially had faced four counts of fraud over collateral used for USDA loans when he was initially indicted in 2020.

According to court documents, in October 2015, Engelkes pledged 15,641 bushels of soybeans as collateral to the Commodity Credit Corp. (CCC) to obtain loan proceeds of nearly $80,000. During the application process for the CCC loan, Engelkes agreed to not move or dispose of the soybeans until the loan was paid in full. However, in April 2016, officials from USDA learned that Engelkes had removed the pledged soybeans without prior approval and sold the bushels. In addition to the USDA CCC loan, Engelkes also defaulted on other farm financing from USDA, resulting in a total loss amount to the government of $435,517.78.

According to the plea agreement, Engelkes recognized his farm was struggling financially and had determined he needed to sell his pledged crops in order to pay off other debts that were accumulating. So, he sold the beans to a local grain elevator and used the money to pay off other debts rather than USDA.

This case was the result of an investigation conducted by the U.S. Department of Agriculture-Office of Inspector General.

The U.S. District Court for Minnesota has had multiple cases involving farmers recently, including a Minnesota farmer last month who pleaded guilty to crop insurance fraud. (…)

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Chris Clayton