Columbus County Man Receives 11 Years In Prison For Crop Fraud Conspiracy, Money Laundering, And Bank Fraud
RALEIGH – The United States Attorney’s Office for the Eastern District of North Carolina announced that today in federal court, MILTON RUSS BARNHILL, 48, of Tabor City, North Carolina, was sentenced to a total of 11 years in federal prison on charges of Conspiracy to Make False Statements in Connection with Federal Crop Insurance; Making False Statements in Connection with Federal Crop Insurance; Mail Fraud, and Money Laundering. BARNHILL was also sentenced to 3 years of supervised release and ordered to make restitution of $2,512,097 to various federal programs and to the Horry County State Bank. The Court also ordered BARHNILL to forfeit the proceeds of his crimes.
BARNHILL previously went to trial on these charges on August 4, 2015, but pled guilty following jury selection.
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 twelve 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 using the name of 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 fifteen through nineteen 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.
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; the United States Internal Revenue Service–Criminal Investigations; and the United States Postal Inspection Service, with the assistance of the Columbus County Sheriff’s Office and the Whiteville Police Department. Assistant United States Attorneys Banumathi Rangarajan and William M. Gilmore handled the prosecution on behalf of the Eastern District of North Carolina.