Judie Lynn Hoffman Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Billings on August 3, 2010, before Chief U.S. District Judge Richard F. Cebull, JUDIE LYNN HOFFMAN, a 51-year-old resident of Richey, pled guilty to theft of government money and willful acts affecting a personal financial interest. Sentencing has been set for November 4, 2010. She is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
In 2009, HOFFMAN was a Program Technician for the Farm Service Agency (FSA) in Glendive (Dawson County FSA Office).
Between September 17, 2009, and October 1, 2009, while employed with FSA, HOFFMAN destroyed a relevant portion of a Request for Loan Deficiency Payment Agreement (CCC-633 EZ) submitted by her producer husband in order to increase their USDA durum wheat deficiency payment. As a result, the HOFFMANS' farming corporation received a total of $14,680 in federal funds to which it was not entitled.
HOFFMAN admitted that she destroyed five or six CCC-633 EZ forms for JH Farms Incorporated, the family farming operation, so they would receive a higher loan deficiency payment (LDP). When a producer submits the CCC-633 EZ form, the date of the submission, or filing date, sets the rate of, or "locks-in," the federal deficiency payment based upon the market on that day.
On September 17, 2009, a fellow FSA employee overheard HOFFMAN on the telephone with her husband, discussing how to send a fax from their home. Shortly thereafter, the employee observed that Page No. 2 of CCC-633 EZ for JH Farms, Inc. arrived on the FSA fax machine. Item No. 24, the LDP Rate, on the form was blank, but the employee had looked up the county price for durum for that day and saw that it was $3.98. Since the rate is "locked in" when the form is submitted, JH Farms, Inc. was locked in at the LDP rate of $0.55 a bushel for his durum.
The employee had not removed the LDP request from the fax machine. A short time later, a Natural Resource Conservation Service (NRCS) employee brought the form to the FSA office and asked who it belonged to. HOFFMAN told the NRCS employee that it belonged to her.
The following week, a producer and friend of HOFFMAN's husband, asked HOFFMAN if her husband had locked in his durum rate yet. HOFFMAN said "No." After hearing that, the FSA employee referred to above became suspicious as she knew she had seen the LDP request on the fax machine. After work, she looked on HOFFMAN's desk and could not find the CCC-633 EZ for JH Farms, Inc. Around the last week of September 2009, HOFFMAN's husband was in the FSA office, and was asked if he had locked into the LDP rate. He said "No."
On October 1, 2009, the FSA employee again overheard HOFFMAN on the telephone. HOFFMAN made a comment to the effect that she would go down to the fax machine and get it. The other FSA employee hurried to the fax machine and saw Page No. 2 of a CCC-633 EZ for JH Farms, Inc. arrive on the fax machine with the LDP rate blank. The date appeared to have been altered. The FSA employee knew the county price for the day was $2.98, which locked in the LDP rate at $1.55 per bushel, $1 a bushel higher than on September 17, 2009. The employee left the form on the fax.
On October 6, 2009, the FSA employee reported the incident to the County Executive Director (CED). The CED found several LDP request folders in his "in" basket for several producers, including HOFFMAN's husband. The CED placed a sticky-note on the JH Farms file that read, "needs DD approval." The CCC-633 EZ (Exhibit 2) date stamped October 1, 2009, showed the county price/LDP rate as $2.98/$1.55.
On the morning of October 7, 2009, HOFFMAN entered the CED's office and picked up the LDP files, and as soon as she saw "needs DD approval" on the JH Farms folder she quickly placed all the files back in his box, making some comment that she could not find what she was looking for. The CED later discovered that HOFFMAN had already dispersed the JH Farms LDP payment. FSA policy states that the CED approves the LDP requests prior to money dispersal.
On October 9, 2009, the CED and the District Director for FSA, confronted HOFFMAN. They explained that another FSA employee had seen and observed HOFFMAN's actions with regard to the two forms. A copy of the FSA fax log showing that a fax had been sent from HOFFMAN's fax number on the evening of September 16, 2009, and asked her what had been faxed to the FSA office. HOFFMAN denied any knowledge. The DD expressed her concern that Page No. 2 of HOFFMAN's husband's CCC-663EZ received by FSA on October 1, 2009, was his second request and that it had originally been received on the fax machine by FSA on the morning of September 17, 2009. Again, HOFFMAN indicated that she had no idea what they were talking about.
The DD reminded HOFFMAN of the conflict of interest rules in the personnel manual, that HOFFMAN was not authorized to work on her husband's program files, and that it was to immediately cease. HOFFMAN indicated that she had seen and was aware of the conflict of interest policy. HOFFMAN later entered her office, shut the door, and told her that she shredded the first LDP request. HOFFMAN told her that she and her husband had a new fax machine, and that her husband had told her that he faxed it, but the fax machine gave him an error message, so when she never found it on her desk, she thought it had never come through on the fax. HOFFMAN told the DD that she processed the new CCC-633 EZ request faxed on October 1, 2009, and then found the first request from September 17, 2009, and shredded it.
During the investigation, investigators retrieved the HOFFMAN's FAX transmittal log and discovered that they had successfully faxed nine documents to FSA between September 15, 2009, and October 1, 2009. HOFFMAN then admitted, and provided a handwritten voluntary statement, that on September 17, 2009, as well as on four or five other occasions, that she destroyed Page No. 2 of a CCC-633 EZ for JH Farms, Inc., that her husband had faxed to FSA. HOFFMAN was not sure why she destroyed the first fax but admitted to destroying the other four or five faxed CCC-633 EZ forms because she knew she could get a better price for her husband. HOFFMAN acknowledged that she knew the conflict of interest policy that stated employees are not to participate in government matters when family members are involved. She previously processed her husband's payment because she believed she wasn't doing anything wrong and claimed the incident was her first violation.
HOFFMAN said that her husband faxed the CCC-633 EZ forms at night, and in the morning she destroyed the fax she received after she determined the LDP rate was higher for the day. HOFFMAN claimed that she told her husband that the faxes were not coming through to the FSA office.
HOFFMAN faces possible penalties of 10 years in prison, a $250,000 fine and at least 3 years supervised release.
The investigation was conducted by the U.S. Department of Agriculture - Office of Inspector General.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.