LINCOLN, Neb. (DTN) -- Clayton County, Iowa, farmer Michael Wayne Butikofer was sentenced to more than 15 years in prison and ordered to pay more than $5.7 million in restitution after pleading guilty to livestock theft, wire fraud and making false bankruptcy declaration, according to the U.S. Attorney's Office in the Northern District of Iowa.
The Monona, Iowa, farmer admitted to stealing more than $5 million in livestock and COVID-19 pandemic benefits.
Butikofer is being held in the United States Marshal's custody until he can be transported to a federal prison after his Oct. 11 sentencing in the U.S. District Court for the District of Northern Iowa. He also was sentenced to three years of supervised release once the prison term is completed.
The U.S. attorney detailed a laundry list of crimes Butikofer admitted to as part of a plea agreement, including the use of forced labor on his farm.
Butikofer operated a large farming operation in northeast Iowa known as Fawn Hollow, which included a so-called custom cattle-feeding operation.
Employees would raise and care for cattle owned by other individuals, including cattle investors located across the United States. Fawn Hollow then sold the cattle, primarily to a Wisconsin slaughterhouse.
FORCED LABOR
In 2018, Butikofer used forced labor to financially benefit Fawn Hollow.
"Butikofer dumped dead cattle near a house in which the H2-A workers lived on his farm," according to the U.S. attorney.
"The workers had no hot water or furniture and their water was contaminated. On one occasion, Butikofer assaulted one worker, grabbing the migrant worker by the shirt and pushing him towards a corn auger. Butikofer also tied the hands of another South African H-2A worker with a cable tie to an electric jigsaw and threatened workers with hanging and an electric shock dog collar."
In 2020, three migrant workers obtained a $247,000 civil judgment against Butikofer in federal court for violations of the Fair Labor Standards Act and the Trafficking Victims Protective Reauthorization Act.
As part of his plea agreement, Butikofer is required to pay the H-2A workers' entire $247,000 judgment and to voluntarily terminate and cease participation in foreign labor programs with respect to any program administered by the U.S. Department of Labor or U.S. Department of Homeland Security.
"Butikofer later used his fraudulent bankruptcy proceeding to convince the workers to settle their judgment for $75,000," the U.S. attorney said.
"From April 2023 to November 2023, while on federal pretrial release, Butikofer recruited and caused another person in the Fawn Hollow criminal organization to recruit H-2A workers to the United States under false and fraudulent pretenses, representations and promises."
That included misrepresenting the housing conditions provided to the employees, the location of the employees' work, the terms and timing of reimbursement for the employees' work and expenses, as well as payment for injuries sustained during the employment.
"For example, Butikofer convinced an H2-A worker from South Africa to come to the United States and bring his wife and teenaged daughter with him," the U.S. attorney said.
"When the family arrived, however, Butikofer moved the family to live in a camper without water, electricity, or heat. Ultimately, agents from the U.S. Department of Homeland Security rescued the family and paid for their food and shelter at a hotel in Cedar Rapids. Agents later rescued other workers bound for Fawn Hollow in April 2024."
According to the U.S. attorney, while Butikofer's criminal case was pending, he repeatedly contacted witnesses in violation of a court order. Butikofer also attempted to convince grand jury and trial witnesses to make false statements and sign false documents "in attempts to obstruct justice."
NOT REGISTERED WITH USDA
At no time was Butikofer or "Fawn Hollow" registered with the USDA as a dealer under the Packers and Stockyards Act of 1921, the U.S. attorney said in a news release.
Butikofer participated in the H-2A visa program and recruited agricultural workers from the Republic of South Africa to work at Fawn Hollow.
Between July 2020 and February 2022, Butikofer converted the proceeds of sales of cattle owned by eight cattle investors for his own use, totaling more than $2.5 million.
Butikofer had convinced the cattle investors to allow Butikofer to sell the cattle in his own name.
When Butikofer sold the cattle to the Wisconsin slaughterhouse, he "falsely represented to the slaughterhouse that he had 'good and merchantable title to' the cattle when he did not, in fact, own or otherwise have title to the cattle," the U.S. attorney said.
"By convincing the cattle investors to allow Butikofer to sell their cattle in his own name and by fraudulently concealing the true ownership of the cattle from the slaughterhouse, Butikofer attempted to evade the requirements of the act and its regulations for registration, posting of a dealer bond and prompt payment, which would have protected the cattle investors' funds," the U.S. attorney said.
EMERGENCY ASSISTANCE FRAUD
In July 2020 and August 2020, Butikofer defrauded USDA of more than $1.2 million in emergency assistance funds designed to assist livestock producers during the COVID-19 pandemic.
Specifically, applications were submitted in the name of another individual and entitled "Coronavirus Food Assistance Program" payments. Cattle producers qualified for payments on a per-head basis based on the producer's owned inventory of eligible beef cattle on dates selected by producers in 2020.
"It was part of Butikofer's wire fraud scheme that Butikofer falsely represented in CFAP applications that he and some of his associates owned cattle when, in truth, they did not own the cattle in question," the U.S. attorney said.
In February 2022, Butikofer received more than $1.5 million from the Small Business Administration as part of an application for an Economic Injury Disaster Loan. The U.S. attorney said Butikofer made false representations to the SBA about his financial condition and intended use for the SBA loan funds.
FALSE BANKRUPTCY
Butikofer used part of the SBA funds to file for bankruptcy later that same month.
During the bankruptcy case, according to the U.S. attorney, Butikofer perjured himself five times and made a series of false and fraudulent statements about his financial condition in bankruptcy filings.
In March 2022, Butikofer submitted a false and fraudulent statement of financial affairs in his bankruptcy case. There were more than 100 creditors in Butikofer's bankruptcy case and Butikofer used the bankruptcy case to "intentionally delay and hinder their legitimate collection efforts."
Butikofer was sentenced in U.S. District Court Chief Judge C.J. Williams in the U.S. District Court for the District of Northern Iowa. At the sentencing, Judge Williams said Butikofer was operating a "Ponzi" scheme with investor cattle.
U.S. Attorney Timothy T. Duax said in a statement that Butikofer "treated his victims and the rule of law with equal contempt."
Read more on DTN:
"Farmer Faces 30 Years for Fraud, Theft," https://www.dtnpf.com/…
"Iowa Farmer Awaiting Sentence is Fined," https://www.dtnpf.com/….
Todd Neeley can be reached at todd.neeley@dtn.com
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