Plea agreements reached in Stamp Farms-related bank and crop insurance fraud case | Michigan Farm News

Plea agreements reached in Stamp Farms-related bank, bankruptcy and crop insurance fraud case

Category: Crops

by Mitch Galloway and Dennis Rudat | Farm News Media

STAMP-Farms_MFN_4.12.19
Courtesy Photo | MLIVE/Kalamazoo Gazette File

DECATUR – Pending final sentencing hearings scheduled for Aug. 19, it appears a six-year-long agricultural financial and legal drama for one of Michigan’s largest former crop operators will come to an end.

Mike and Melissa Stamp each entered separate plea agreements with U.S. attorneys on Thursday, according to legal documents filed with the U. S. District Court for the Western District of Michigan’s Southern Division. Both plead guilty to reduced charges related to crop insurance, bank and bankruptcy fraud.

In exchange, the two will avoid going to trial in May on charges that could have resulted in maximum 30-year prison sentences if found guilty.

A five-count “Superseding Indictment” filed by U.S. Attorneys in November 2018 outlined numerous charges related to bank and bankruptcy fraud, as well as conspiracy to make false statements to the Federal Crop Insurance Corporation (FCIC) by the former Decatur-based Stamp Farms LLC and Northstar Grain LLC.

According to court filings, Melissa Stamp has agreed to plead guilty to a federal felony, including having “knowledge of the commission of that felony” and failing “to notify an authority as soon as possible” of hiding $40,000 from Wells Fargo Bank and other creditors of Michael Stamp.

Under terms of the plea deal, she faces a maximum of three years in prison; not more than one year of supervised release; a fine of $250,000; and an unspecified amount in Mandatory Restitution.

In return the U.S. attorney's office has agreed to dismiss the underlying Superseding Indictment against her at the time of sentencing in August, and to not oppose her request for a two-level reduction of her offense level.

Michael Stamp has agreed to plead guilty of conspiring with two or more members “to commit bank fraud and provide false statements,” including “a member of the conspiracy did at least one of the overt acts alleged in the (Federal Felony) Information for the purpose of advancing or helping the conspiracy,” according to the court filings. Included in the plea deal is a charge of crop insurance fraud.

According to the terms of plea deal, he faces a maximum penalty of up to five years in prison; a three-year period of supervised release; a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater; and be required to pay an unspecified but full Mandatory Restitution as required by law.

Additionally, he is required to “disclose to law enforcement officials the whereabouts of, the Defendant's ownership interest in, and all other information known to the Defendant about, all monies, property or assets of any kind, derived from or acquired as a result of, or used to facilitate the commission of, the Defendant's illegal activities. The Defendant further agrees to forfeit all rights, title, and interest in and to such items.”

Stamp is also required to fully cooperate with the U.S. Attorney's Office, and other law enforcement agencies in their investigation of the charges, as well as the investigation of crimes over which they have actual or apparent jurisdiction.

“The Defendant's cooperation will consist of all steps needed to uncover and prosecute such crimes, including, but not limited to, providing investigators with a full, complete and truthful statement concerning the Defendant's knowledge of any and all criminal activity of which he is aware; truthfully answering investigators' questions; meeting with prosecutors before testifying; truthfully testifying before grand juries and in any court proceedings; and providing all relevant tangible evidence in the Defendant's possession or under the Defendant's control, including, but not limited to, objects, documents, and photographs.

“The Defendant's obligation to cooperate under this paragraph is an affirmative one and includes the obligation to voluntarily come forward with any and all information which the Defendant should reasonably know will assist in the investigation of other criminal activity.

“The Defendant's obligation under this paragraph is a continuing one, and shall continue after sentencing until all investigations and prosecutions in which the Defendant's cooperation is deemed relevant by the U.S. Attorney's Office have been completed.”

In return, the U.S. Attorney's office has agreed to dismiss the underlying Superseding Indictment against Michael Stamp at the time of sentencing, and to not oppose his request for a two-level reduction of his offense level.

As a result of the guilty pleas, there will be no trial for the Stamps. Calls to Mike Stamp attorney, Scott Graham, and Melissa Stamp attorney, Helen Nieuwenhuis, were not returned in time before this story went to press.

GETTING HERE

According to a “Felony Information” legal filing by assistant U.S. Attorney Clay Stiffler in the plea deal process, Michael Stamp rapidly increased the number of acres farmed by Stamp Farms, LLC, by acquiring agricultural land leases from landowners in Southwest Michigan, often by paying above-market rates. Over several years, Stamp operated his farming and grain elevator businesses with large bank loans and credit agreements.

In or about 2011, the filing states, Stamp needed money to pay for his business operations and pay off a large loan that was due to mature. Between March to December 2011, Stamp fraudulently induced Wells Fargo Bank, National Association, a federally-insured financial institution, to provide a $68 million credit facility (loan) to Stamp Farms, LLC, and Northstar Grain, LLC, by misrepresenting the amount of land he farmed and the value of his farming assets, including harvested grain, fertilizer, and fuel.

According to the filing, in or about 2011 and 2012, after Wells Fargo Bank extended credit under the credit facility, Stamp continued to provide false information about his farming and grain elevator assets in order to induce Wells Fargo Bank to continue extending credit to him.

The filing goes on to state that in or about 2011 and 2012, and earlier, Stamp submitted false claims to the Federal Crop Insurance Corporation and its reinsurers to obtain crop insurance payments to help pay for some of his farming operations and make lease payments.

In particular, Stamp conspired with John Stapel to defraud Wells Fargo Bank by directing Stapel to swear to a false affidavit concerning the amount of offset grain Stamp Farms had in storage. Stamp also conspired with James Leonard Becraft and Douglas Edward Diekman to defraud the Federal Crop Insurance Corporation and its reinsurers.

The filing reads that the object of the conspiracy “was to obtain money, funds, credits, assets, securities, and other property owned by… Wells Fargo Bank and the Federal Crop Insurance Corporation and the companies it reinsures by means of false and fraudulent pretenses, representations, and promises.”