By Timothy S. Donahue

Top Takeaways:

• Seven defendants sentenced in a Kentucky tobacco crop insurance fraud scheme causing nearly $10 million in losses.
• Fake warehouse records were used to inflate insurance claims over multiple crop years.
• Prison sentences and restitution totaled millions, highlighting federal enforcement focus on ag fraud.

A Kentucky farmer was sentenced to more than four years in federal prison on Dec. 19, becoming the seventh and final defendant to be sentenced in a sprawling crop insurance fraud scheme tied to tobacco sales through a central Kentucky warehouse, U.S. prosecutors said.

Larry Walden, 69, of Cave City, received a 52-month prison sentence after pleading guilty to conspiracy to commit money laundering, bringing to a close a multi-year federal investigation that resulted in nearly $10 million in losses to crop insurers.

Federal prosecutors said Walden owned and leased farmland in Barren County, where he grew burley tobacco and other crops, maintaining crop insurance coverage from at least 2014 through 2023. Between 2014 and 2019, Walden used Farmers Tobacco Warehouse in Boyle County to generate false documentation supporting inflated insurance loss claims.

According to Walden’s plea agreement, the scheme involved writing checks to the warehouse to create the appearance that tobacco he produced and sold had instead been purchased through the warehouse. Walden conspired with warehouse manager Thomas Kirkpatrick, who provided fraudulent purchase receipts to further conceal the activity.

Walden then submitted the canceled checks and false receipts to his crop insurance adjuster, who relied on the paperwork to underreport Walden’s actual production and increase his insurance indemnity payments.

Prosecutors said Walden also admitted to running similar fraud schemes through Greensburg Tobacco Market in Kentucky and Fair Deal Tobacco in Littleton, North Carolina. In addition, he sold tobacco under the names of neighbors and relatives while failing to report that production on his insurance claims.

Authorities said Walden’s actions caused nearly $10 million in losses to crop insurance providers.

Six other defendants were sentenced in connection with the conspiracy. Kirkpatrick, 67, of Stanford, the former manager of Farmers Tobacco Warehouse, received 48 months in prison, two years of supervised release, and was ordered to pay more than $16.1 million in restitution.

David Hunt, 63, of Campbellsville, was sentenced to 42 months in prison and ordered to pay $5.43 million in restitution after using false documentation to support fraudulent claims under an organic tobacco insurance policy.

Terry Wilson, 67, of Edmonton, received a sentence of time served, followed by three years of supervised release and restitution of $667,679. His son, Christopher Wilson, 50, was sentenced to 18 months in prison and ordered to pay $669,447.

David Wisdom, 69, of Glasgow, received a 48-month prison sentence and was ordered to pay nearly $1.94 million in restitution, while Robert D. Birge Jr., 51, of Summer Shade, was sentenced to six months in prison and ordered to pay $1.11 million.

Federal law requires the defendants to serve at least 85% of their prison sentences.