Spanning newly two decades and causing over $3 million in losses, an Iowa corporation and four of its high-level managers have been sentenced in federal court after law enforcement uncovered a wide-ranging fraud scheme. The scheme victimized livestock producers throughout the Midwest, says the United States Attorney’s Office in the Northern District of Iowa in a release.
Lynch Family Companies, Inc., also known as “Lynch Livestock,” of Waucoma, Iowa, pled guilty on July 29, 2022, to “Failing to Comply with an Order of the Secretary of Agriculture,” the release states.
As a registered dealer with the Secretary of the USDA under the Packers and Stockyards Act of 1921, the company bought swine from livestock producers and sellers at stations across Iowa and surrounding areas, paying prices based on the numbers, classifications and weights of the animals. However, honesty within these prices faded.
“Beginning in about the early 2000s, and continuing through at least late March 2017, Lynch Livestock’s second-ranking official directed other managers and employees to falsely reduce and downgrade the numbers, quality classifications and weights of swine that producers and sellers had delivered to Lynch Livestock’s buying stations throughout the Midwest,” the release states.
Furthermore, managers at Lynch Livestock’s headquarters created false and fraudulent scale tickets, including the use of a crowbar or other object to manipulate the livestock scales, bearing the initials of managers at the buying stations, as well as produced false and fraudulent invoices to pay less than what was due to producers. The company’s managers and employees then proceeded to shred and burn evidence of fraud as document destruction was a routine practice of the company, the release continues.
Entering two administrative consent decisions with the USDA, in late 2017 and 2021, the company paid $800,000 in restitution to two of its corporate customers and over $400,000 in restitution to various farmers and producers, respectively.
During the various sentencing hearings, Judge C.J. Williams referred to the scheme as “a systematic method of cheating and stealing” from livestock producers and sellers, the release says.
Concluding the hearings, on February 10, the company was sentenced to five years of probation, fined $196,000 and ordered to pay over $3 million in restitution, with credit for the approximately $1.2 million already paid in 2017 and 2021, to livestock producers and farmers, the release says. Further proceedings are expected to be scheduled to allocate the restitution among the company’s victims.
The four high-level managers also face a number of charges. They include:
Billie Joe Wickham, age 51, of Waucoma, Iowa, pled guilty on July 15, 2022, to one count of Conspiracy to Defraud the United States and on January 13, 2023, was sentenced to six months of imprisonment, fined $3,000, and will serve a three-year term of supervised release after the prison term with no parole.
Charlie Lynch, age 65, of Fort Atkinson, Iowa, pled guilty on July 25, 2022, to one count of Conspiracy to Defraud the United States and on January 13, 2023, was sentenced to five years of probation and fined $3,000.
Leland “Pete” Blue, age 60, of Fredericksburg, Iowa, pled guilty on July 28, 2022, to one count of Conspiracy to Defraud the United States, and on January 13, 2023, was sentenced to five years of probation and fined $1,000.
Tyler Thoms, age 31, of Fayette, Iowa, pled guilty on August 9, 2022, to one count of Causing a Livestock Dealer to Keep Inaccurate Accounts and Records and was sentenced to one year of probation on January 13, 2023.
The case file numbers are 21-CR-2074 (Wickham and Lynch), 21-CR-2042 (Blue), 22-CR-2043 (Lynch Family Companies, Inc.), and 22-CR-2044 (Thoms).
