Summary of a Recent
Judicial Development in
Farm Commodity Programs

Producer Criminally Prosecuted for Payment
Limits Violation

Brandon Willis
National AgLaw Center Graduate Assistant

In Huber Farms v. United States, 404 F.3d 1047 (8th Cir 2005), producers appealed convictions for "violating various federal laws dealing with fraudulent statements to the government, tax fraud, and money laundering. The district court sentenced Huber [producer] to sixty-months imprisonment." See id. at 1051. The producer's scheme involved four people who rented or subleased the producer's land, used his machinery, and paid the producer certain amounts for labor he supposedly performed. See id. at 1051-1052. The government alleged that Huber enlisted these people "to defraud government programs of millions of dollars in benefits in the form or farm-program payments and federally subsidized crop-insurance benefits." Id. at 1051. Allegedly, the producer chose this structure to avoid payment limitations in the programs. Id. at 1052. The government argued that these other individuals "were not eligible to receive such benefits because they had no farms of their own." Id. The Court of Appeals for the Eighth Circuit affirmed, and among other things required the forfeiture of legitimate crop-sales proceeds pursuant to 18 U.S.C. §982(a)(1), a criminal forfeiture statute. See id. at 1058. However, the court did not allow the forfeiture of insurance proceeds since "the premium charges were not part of the corpus of the money-laundering conspiracy." Id. at 1060. The court vacated the sentences imposed and remanded for resentencing since they felt changes with the forfeiture amount may influence the sentences imposed. See id. at 1062.

The case was decided on April 21, 2005; this summary was posted Oct. 25, 2005.