United States Obtains Fraud Judgment In Discrimination Class Action Case
GREAT FALLS – The United States Attorney’s Office announced today that it has obtained a summary judgment for fraud in the filing of a fraudulent claim in a nationwide class-action lawsuit in which Native American producers claimed discrimination in the handling of their agriculture loans by the Farm Services Agency (FSA) of the U.S. Department of Agriculture (USDA).
In a civil False Claims Act suit against Patrick Charles Thomas, 56, of Cut Bank, the government alleged that Thomas had made fraudulent representations as to his eligibility for a share of the proceeds from the Keepseagle class action settlement. The United States seeks recovery and damages in the amount of $944,690.73. In his November 4, 2014, order, U.S. District Judge Brian Morris entered summary judgment in favor of the United States. The amount to be awarded to the government will be determined by a separate court order.
In Keepseagle v. Vilsak, Civil Action No. 1:99-CV-03119 (DDC) (EGS), a class action lawsuit was pursued by Native American farmers and ranchers alleging that they had been discriminated against by the USDA and that they had been denied equal access to credit in the USDA Farm Loan Program. As a result of that lawsuit, on April 28, 2011, a $710 million settlement with the USDA was approved, and claims were entertained from individual Native American producers who asserted that they had been discriminatorily aggrieved by the USDA in the lending process.
The Native American farmers and ranchers entitled to file a claim and receive relief under the settlement were producers who: a) farmed or ranched or attempted to farm or ranch between January 1, 1981 and November 24, 1999; b) sought, or attempted to seek, a farm loan from the USDA during that period; c) had their application denied, provided late, approved for a lessor amount than asked, was encumbered by restrictive conditions, or failed to have appropriate loan servicing; d) complained about discrimination to the USDA during the same time period; and, e) suffered economic harm attributable to USDA actions.
Successful claimants were eligible to receive a payment of up to $50,000 and forgiveness of some or all outstanding USDA loans.
In December of 2011, Patrick Thomas, a former Chairman of the Blackfeet Tribe and a rancher who operated near Cut Bank, made a Keepseagle claim alleging that he had been discriminated against. In his claim he marked the “Yes” box for the question “Were you denied an opportunity to submit application(s) for loan(s) or loan servicing, or discouraged from applying between January 1, 1981 and November 24, 1999?”. In an affidavit in support of his claim, Thomas represented that on three occasions his loans were thrown away by the FSA representative. Thomas alleged that he had communicated his claim of discrimination, as required to participate in the settlement, to FSA representatives at the time. Thomas’s claim was processed and he received $50,000 and forgiveness of all of his FSA debt. The award and forgiveness of debt totaled $314,896.91.
On April 18, 2013, Thomas was indicted by a federal Grand Jury which charged him with filing a false claim in the Keepseagle litigation, selling secured property, and making false statements with regard to his application for and receipt of federal agricultural loans. The United States dismissed the Keepseagle count from the indictment on July 2, 2013, electing instead to pursue the fraud claim as a civil matter. Thomas pleaded guilty to selling property pledged as collateral to the FSA and was sentenced to a year and a day in prison in October 2013. His criminal case has been appealed to the Ninth Circuit.
During the course of the criminal case Thomas admitted that he had not alleged discrimination during the eligibility period. On the basis of his admissions, Judge Morris found no material dispute of fact as to whether Thomas filed a false Keepseagle claim and granted judgment to the United States.
U. S. Attorney Mike Cotter welcomed the decision. “Discrimination is too important a concern and too serious an allegation to be diminished by fraud and deceit. If a Native American farmer or rancher was discriminated against, that producer is entitled to a remedy. Those who make fraudulent claims only cast aspersion on valid claims and undermine the public’s confidence in the justice system. They must be held to account for the fraud, not just because all fraud is wrong, but to preserve respect for the law and the institutions that provide remedies for the honestly aggrieved.”