Stamp Farms LLC co-defendant sentenced on crop insurance fraud | Michigan Farm News

Stamp Farms LLC co-defendant sentenced on crop insurance fraud

Category: Crops

by Dennis Rudat and Mitch Galloway | Farm News Media


Douglas Diekman, one of two co-defendants named alongside Michael Stamp in a December 2017, 14-count federal indictment related to the former Decatur, Mich.-based Stamp Farms LLC, was sentenced on Monday in the United States District Court in Kalamazoo.

Under terms of an Aug. 1, 2018 plea deal, Diekman agreed to plead guilty to one count of conspiracy for making false statements to the Federal Crop Insurance Corp. (FCIC). As a result, Diekman will now serve a 13-month prison term, two years of supervised release, and pay a restitution fee of $488,432.86.

According to court documents, he could have faced a maximum sentence of five years; a three-year period of supervised release; and a $250,000 fine, with a stipulation that he could be required to make mandatory restitution.

In an email to Michigan Farm News on Tuesday, Diekman’s attorney, Michael D. Hills of the Kalamazoo-based Hills at Law PC, said he’s reviewing options and possible next steps, including an appeal.

Michael D. Hills, attorney for Diekman Courtesy Photo- Hills at Law PC

“We are grateful the Judge took into account Mr. Diekman’s circumstances, relative culpability, cooperation with all agencies involved and reduced his sentence from what was recommended,” Hill wrote. “The Judge has allowed Mr. Diekman to ‘self-report,’ which means he will be allowed to surrender to a facility when the time comes.”

Hills added that there are some concerns related to the loss calculation as a possible basis for an appeal.

“These issues revolve around the calculation of the ‘actual loss’ amount that directly drives the sentencing guidelines, and, in turn, impacts the sentencing court’s decisions on incarceration and restitution,” he said. “There were significant issues raised at sentencing that have not been addressed by the Sixth Circuit Court of Appeals or the U.S. Supreme Court that we may seek to appeal. What the loss is to a potential vendor, insurance company, government or whomever the victim happens to be. How that number is calculated may make a difference in the guideline scoring and, separately, the restitution applicable to a defendant.

“The metrics used to make this determination have not been fully developed in our circuit.”


Diekman had subleased approximately 1,100 acres of farmland to Stamp Farms from 2006 through 2012. During that time, the land was farmed by Stamp Farms LLC, which was owned by Michael Stamp.

Diekman did not farm the land and did not provide any of the inputs — such as seed, fertilizer, or labor — to grow crops on the land, according to a Government Sentencing Memorandum filed on Dec. 12, 2018.

“Therefore, Diekman had no ownership interest in the crop, and was not allowed to obtain crop insurance in his own name,” the memorandum read. “That is because, as a landowner who was paid rent, Diekman was not exposed to the risk of financial losses resulting from the natural calamities that crop insurance is intended to protect against: Since he did not spend any money on seeds, fertilizer, or labor, Diekman was not exposed to financial losses if his crop was damaged by drought, for example.”

According to the sentencing memo, the local USDA office contacted Diekman in August of 2006 to inquire if he was farming his own land, stating they had been informed that Diekman was not farming the land but instead cash renting it to Stamp Farms.

The USDA informed Diekman he was not entitled to crop insurance if he was, in fact, cash renting his farmland to Stamp Farms.

The sentencing memo goes on to allege that Diekman, after consulting with Stamp, falsely told the local USDA office he was farming the land. As proof, Diekman provided approximately $123,000 worth of false invoices — prepared by Stamp — under the name Stamp Farms Custom Ag LLC for custom fertilizer and chemical applications, custom planting, and seed and chemical inputs for the 2006 crop year.

“These invoices were entirely fraudulent,” according to the sentencing memo. “Diekman, nevertheless submitted them to the USDA as ‘proof’ that he had an ownership interest in the crop, and therefore was entitled to place crop insurance under his name.

“Diekman submitted documents to obtain federal crop insurance in his own name — signed under penalty of perjury — in which he falsely attested that he was farming the land he rented to Mr. Stamp and had a 100 (percent) interest in the crop. Diekman wanted the crop insurance in his name so that he could be assured of a payment in the event that Mr. Stamp was unable to make Diekman’s rent payments.

“Mr. Stamp wanted the land insured in Diekman’s name so that he could qualify for more crop insurance and as an incentive to induce Diekman to rent land to him. Stamp Farms paid all the premiums for the crop insurance coverage.

“Diekman made false crop insurance claims for crop years 2008, 2009 and 2012, and received crop insurance indemnity payments for those years. As with his crop insurance applications, Diekman falsely attested that he had farmed the land and had a 100 percent interest in the crops.

“Diekman turned over to Mr. Stamp the crop insurance indemnity payments for the 2008 and 2009 crop years, which totaled about $86,000. But he kept a $141,610.84 crop insurance indemnity payment for the 2012 crop year for himself, since Mr. Stamp had filed for bankruptcy and was unable to make Diekman’s rent payment.

“Diekman’s misrepresentations for each of the crop years, including 2012, rendered the crop insurance policies void in their entirety. Therefore, no insurance payment should have been made, and there are no ‘legitimate’ losses or claims under the policies.”


The other co-defendant alongside Diekman, James Becraft, who also plead guilty to one count of conspiracy of making false statements to the FCIC earlier this year, is schedule for sentencing in Kalamazoo on Feb. 11, 2019.