Columbus County Man Pleads Guilty To Bank Fraud, Falsifying Crop Insurance Claims, And Money Laundering Following Jury Selection
RALEIGH - United States Attorney Thomas G. Walker announced that today in federal court, following jury selection in his criminal trial, MILTON RUSS BARNHILL, of Tabor City, North Carolina, entered guilty pleas to all pending counts against him.
Count one of the indictment charged the defendant with conspiring with others to defraud the Federal Crop Insurance Corporation (FCIC) and the Farm Service Agency (FSA), both agencies of the United States, in connection with federal crop insurance claims and other federal taxpayer subsidies. As charged, the defendant produced crops which he sold in the names of others. The Defendant and others then reported on insurance claims that the crops were lost due to natural disasters. The defendant also placed crops and insurance policies into the names of conspirators to boost the amount of money he could collect on the insurance claims.
Counts two through eight, ten, and eleven of the indictment each charged the defendant with falsifying and aiding and abetting others to falsify federal crop insurance claims. The defendant received more than $1 Million into his bank account that was derived from hidden crop production, underreported crop production, and overstated crop acreages, all on federal crop insurance documents.
Count 12 of the indictment charged the defendant with committing mail fraud that resulted in Horry County State Bank paying out approximately $450,000 in fraudulent loan proceeds. On this count, the defendant supplied a fictitious tobacco sales contract to Horry County State Bank as collateral for a farm operating loan. In fact, the contract was fictitious, included references to a bogus tobacco receiving station, and was signed by a fictitious person. The phone number the defendant provided to the bank as the number for the tobacco receiving station was, in fact, a prepaid cell phone that the defendant purchased in Clinton, North Carolina. The P.O. Box for the tobacco receiving station was, in fact, a mailing address applied for by the defendant.
Counts 15 through 19 charged the defendant with using the proceeds from the foregoing frauds to fund other transactions in excess of $10,000 in value. The evidence showed that the defendant received fraudulent bank monies into his account. The defendant then used those funds to promote the ongoing production of crops in the names of conspirators, who he also caused to file false crop insurance claims.
At sentencing, the defendant faces up to 30 years in prison on each of Counts 2 through 8, 10, and 11, pertaining to false federal crop insurance claims. The defendant faces up to 30 years in prison on Count 12, pertaining to the mail fraud upon Horry County State Bank. The Defendant faces up to 10 years in prison on each of Counts 15 through 19 pertaining to Mail Fraud. Lastly, the defendant faces up to 5 years in prison on Count 1, pertaining to the conspiracy.
The criminal investigation of this case was conducted by United States Department of Agriculture – Office of the Inspector General - Investigations; United States Department of Agriculture - Risk Management Agency – Special Investigations Branch; and the United States Internal Revenue Service – Criminal Investigations; with the assistance of the Columbus County Sheriff’s Office and the Whiteville Police Department. Assistant United States Attorney William M. Gilmore handled the prosecution at trial on behalf of the Eastern District of North Carolina.