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NEWS RELEASE

OFFICE OF THE UNITED STATES ATTORNEY

WESTERN DISTRICT OF MISSOURI


JOHN F. WOOD


Contact Don Ledford, Public Affairs ● (816) 426-4220 ● 400 East Ninth Street, Room 5510 ● Kansas City, MO 64106

www.usdoj.gov/usao/mow/index.html


FEBRUARY 8, 2008

FOR IMMEDIATE RELEASE


COLE CAMP BUSINESS OWNER PLEADS GUILTY

TO WIRE FRAUD, TAX EVASION


CUSTOMERS OF FARM SUPPLY STORE

LOST NEARLY $950,000


            JEFFERSON CITY, Mo. – John F. Wood, United States Attorney for the Western District of Missouri, announced that a Cole Camp, Mo., business owner pleaded guilty in federal court today to wire fraud and tax evasion related to a nearly $950,000 scheme to sell farm supplies at bargain prices.


            Robert Thomas Bain, 42, of Cole Camp, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge William A. Knox this morning to a federal information that charges him with wire fraud and tax evasion. Bain operated Heartland Farm Supply, which he incorporated as Heartland Farm Services, Inc., in February 2004, a retail business selling propane and farm equipment.


            By pleading guilty today, Bain admitted that he developed a fraud scheme to offer propane, fertilizer and other farm supplies to customers at prices below the market rate. Bain knew he could not purchase these items for the price he quoted to his customers, but made the offer in order to induce customers to pay a membership fee and join Heartland. Bain required his customers to pay a deposit and, on some occasions, the full amount for the quantity of farm supplies ordered. Bain did not deliver all of the quantity of the product the customers paid for and had no intention of doing so.


            According to today’s plea agreement, the full amount of the loss to Bain's customers totals approximately $948,737.


            The wire fraud charge to which Bain pleaded guilty refers to a $172,500 wire transfer from Illinois to Bain’s Heartland bank account, which was for the purchase of potash fertilizer that Bain never delivered to the customer and had no intentions of delivering.


            During 2004, approximately $3 million Heartland gross receipts were deposited into the Heartland business checking account. Bain had business expenses of approximately $2.76 million during 2004. Bain failed to file a 2004 federal income tax return on taxable income of approximately $285,000. Bain also failed to report business gross receipts of $4,849 and expenses of $18,077 for A Taste of Germany, a business that his wife operated.


             In 2003, Bain failed to report his Heartland business profits, and therefore his 2003 federal income tax return was false. For the year 2003, Bain had federal taxable income of $39,309 and owes federal tax in the amount of $13,138.


            Under federal statutes, Bain could be subject to a sentence of up to 25 years in federal prison without parole, plus a fine up to $500,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.


            This case is being prosecuted by Assistant U.S. Attorney Lawrence E. Miller. It was investigated by the Federal Bureau of Investigation, IRS-Criminal Investigation and the Missouri Attorney General’s Office.


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This news release, as well as additional information about the office of the United States Attorney for the Western District of Missouri, is available on-line at

www.usdoj.gov/usao/mow/index.html