Sentencing of Livestock Dealer and Four Managers in Extensive Pig Fraud Conspiracy

In a federal court proceeding, an Iowa-based corporation and four of its top executives have been sentenced after a long and extensive fraudulent scheme that targeted livestock producers across the Midwest, resulting in over $3 million in losses over a period of almost twenty years.

Lynch Family Companies, Inc., also known as "Lynch Livestock," located in Waucoma, Iowa, entered a guilty plea on July 29, 2022, for failing to comply with an order issued by the Secretary of Agriculture. On February 10, 2023, Lynch Livestock was ordered to serve a five-year probation, pay a fine of $196,000, and provide restitution of over $3 million to affected livestock producers and farmers.

Billie Joe Wickham, 51, from Waucoma, Iowa, pleaded guilty on July 15, 2022, for conspiracy to defraud the United States. On January 13, 2023, Wickham received a six-month prison sentence and a fine of $3,000. After completing the prison term, Wickham must also undergo three years of supervised release, as parole is not an option in the federal system.

Charlie Lynch, 65, residing in Fort Atkinson, Iowa, pleaded guilty on July 25, 2022, for conspiracy to defraud the United States. On January 13, 2023, Lynch was placed on five years of probation and ordered to pay a fine of $3,000.

Leland "Pete" Blue, 60, from Fredericksburg, Iowa, pleaded guilty on July 28, 2022, for conspiracy to defraud the United States. On January 13, 2023, Blue was sentenced to five years of probation and fined $1,000.

Tyler Thoms, 31, from Fayette, Iowa, pleaded guilty on August 9, 2022, for causing a livestock dealer to maintain inaccurate accounts and records. On January 13, 2023, Thoms received a one-year probationary sentence.

As part of its plea agreement, Lynch Livestock acknowledged its registration with the Secretary of the United States Department of Agriculture (USDA) as a dealer under the Packers and Stockyards Act of 1921. Lynch Livestock operated buying stations in the Northern District of Iowa and other areas, where they purchased swine from livestock producers and sellers. The payment made by Lynch Livestock for these swine was determined based on their quantities, classifications, and weights.

Starting in the early 2000s and continuing until at least late March 2017, the second-ranking official at Lynch Livestock directed other employees to dishonestly reduce and downgrade the numbers, classifications, and weights of the swine brought in by producers and sellers at their buying stations located throughout the Midwest, including those in the Northern District of Iowa. This scheme primarily affected large-scale corporate swine producers who sold their swine to Lynch Livestock. To carry out this fraud, Lynch Livestock's headquarters personnel fabricated counterfeit scale tickets, initialling them with the signatures of the buying station managers. Through these falsified records, Lynch Livestock and its managers managed to generate invoices that misrepresented the amount owed to the producers. Company employees routinely destroyed evidence of this fraudulent activity by shredding and burning documents whenever they suspected that USDA officials were investigating.

In late 2017, Lynch Livestock and the USDA reached an administrative consent agreement under the Act, wherein Lynch Livestock agreed to pay nearly 0,000 in restitution to two of its corporate customers due to the fraud committed at two specific buying stations in Iowa. However, in their plea agreement, Lynch Livestock acknowledged that the overall financial losses resulting from their fraudulent practices prior to 2018 were more extensive and not limited to the two mentioned corporate customers or the two buying stations.

Between 2018 and March 2021, Lynch Livestock's managers and employees carried out further deceptive actions by tampering with the scales used to weigh the swine brought in by livestock producers at their buying stations. They used tools like crowbars to manipulate the scales, resulting in falsified scale tickets that inaccurately represented the weight of the swine. Consequently, Lynch Livestock paid lower amounts than what was rightfully owed to the livestock producers and violated the terms of the 2017 consent agreement with the USDA. In 2021, Lynch Livestock and the USDA entered into a second administrative consent agreement, whereby Lynch Livestock committed to pay over $400,000 in restitution to various farmers and producers.

Various hearings in the cases presented evidence that Wickham held a direct reporting line to the second-ranking official and actively engaged in fraudulent activities for a period exceeding fifteen years. Wickham also played a pivotal role in the conspiracy, instructing other employees to falsify scale tickets and manipulate the sorting of swine in order to undervalue them for producers. Charlie Lynch, who was responsible for sow procurement and marketing at Lynch Livestock, also participated in the scheme by downgrading classifications on sows sold by producers to Lynch Livestock, starting no later than 2013 until around 2017. Blue, who managed Lynch Livestock's sow inventory, joined the illicit scheme by no later than 2012. Thoms initially worked as a bookkeeper alongside Wickham, Lynch, and Blue at Lynch Livestock's headquarters building and later, from approximately 2018 to early 2021, managed Lynch Livestock's buying station in Waucoma, Iowa. While working as a bookkeeper, Thoms engaged in the forgery of scale tickets. As a manager, Thoms resorted to using a crowbar to manipulate the scales and deceive producers.

The defendants were sentenced by United States District Court Judge C.J. Williams in Cedar Rapids. Wickham, who had previously posted bail, is required to surrender to the Bureau of Prisons on a date that is yet to be determined. During the sentencing hearings, Judge Williams characterized Lynch Livestock's fraud scheme as "a systematic method of cheating and stealing" from livestock producers and sellers, emphasizing that the fraud aimed to gradually exploit victims on a daily basis. Lynch Livestock cooperated with the government's criminal investigation and has agreed to implement various compliance measures as part of its plea agreement.

Under the terms of the plea agreement, Lynch Livestock has committed to paying more than $3 million in restitution, taking into account approximately $1.2 million already paid due to USDA consent decisions in 2017 and 2021. As for the remaining $1.8 million in restitution that will be made available to livestock producers and sellers, Judge Williams has scheduled further proceedings to allocate the restitution among the victims of Lynch Livestock.

United States Attorney Timothy Duax stated, "For nearly two decades, Lynch Livestock and its managers deceived livestock producers throughout the Midwest. These prosecutions aim to restore justice by demanding $3 million in restitution from Lynch Livestock and sending a clear message that our office is dedicated to eradicating agricultural fraud in this state."

Assistant United States Attorneys Timothy L. Vavricek and Matthew J. Cole led the prosecution, while the United States Department of Agriculture's Office of Inspector General and the Federal Bureau of Investigation conducted the investigation.

Court file information can be found at https://ecf.iand.uscourts.gov/cgi-bin/login.pl.

The case files are numbered as follows: 21-CR-2074 (Wickham and Lynch), 21-CR-2042 (Blue), 22-CR-2043 (Lynch Family Companies, Inc.), and 22-CR-2044 (Thoms).

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