Seven Farmers and Tobacco Warehouse Manager Sentenced in Nearly $10 Million Crop Insurance Fraud Scheme

Federal authorities have concluded a multi-year crop insurance fraud investigation centered on a Kentucky tobacco warehouse, resulting in prison sentences and millions of dollars in restitution orders against seven farmers and a warehouse manager who systematically manipulated federal insurance programs.

The final sentencing in the case occurred on December 19, 2025, when Larry Walden, 69, of Cave City, Kentucky, was sentenced to 52 months in federal prison for conspiracy to commit money laundering through crop insurance fraud. Walden’s sentencing closes one of the largest agricultural insurance fraud prosecutions in the Eastern District of Kentucky.

According to court records, Walden owned and leased farmland in Barren County, where he grew burley tobacco and other crops. From at least 2014 through 2019, Walden exploited services at Farmers Tobacco Warehouse in Boyle County to generate false documentation supporting fraudulent crop loss claims. Those documents were then submitted to insurance adjusters to artificially reduce reported production and inflate indemnity payments.

Investigators determined that Walden conspired directly with Thomas Kirkpatrick, the warehouse’s manager, to fabricate tobacco purchase records. Walden wrote checks to the warehouse to make it appear that tobacco he produced had been purchased elsewhere. In return, he received falsified receipts, which were presented alongside canceled checks to insurance adjusters. The altered documentation was used to justify lower production figures, triggering significantly higher insurance payouts.

Walden admitted to running similar schemes through Greensburg Tobacco Market in Kentucky and Fair Deal Tobacco in North Carolina. He also sold tobacco under the names of relatives and neighbors, concealing production that should have been reported. Federal prosecutors calculated the total loss to crop insurers at 9,960,817.19 dollars, all of which Walden has been ordered to repay. Following his prison term, he will serve three years of supervised release.

Additional Sentencings in the Conspiracy

Multiple co-conspirators have already been sentenced for their roles in the same fraud network:

• Thomas Kirkpatrick, 67, former manager of Farmers Tobacco Warehouse, received 48 months in prison, two years of supervised release, and was ordered to pay 16,156,345 dollars in restitution.
• David Hunt, 63, of Campbellsville, Kentucky, was sentenced to 42 months in prison, three years of supervised release, and 5,427,365 dollars in restitution for submitting fraudulent claims tied to organic tobacco coverage.
• Terry Wilson, 67, of Edmonton, Kentucky, received time served followed by three years of supervised release and 667,679 dollars in restitution.
• Christopher Wilson, 50, was sentenced to 18 months in prison, three years of supervised release, and 669,447 dollars in restitution.
• David Wisdom, 69, of Glasgow, Kentucky, was sentenced to 48 months in prison, three years of supervised release, and 1,941,007 dollars in restitution.
• Robert D. Birge Jr., 51, of Summer Shade, Kentucky, received six months in prison, three years of supervised release, and 1,114,519 dollars in restitution.
• Harlan Ray Highfield, 63, of Brooksville, Kentucky, was previously sentenced to 42 months in prison, three years of supervised release, and 1,060,460 dollars in restitution for a related crop insurance fraud scheme involving nominee policies.

Under federal law, each defendant must serve at least 85 percent of their prison sentence.

Investigation and Enforcement

The investigation was conducted jointly by the United States Department of Agriculture Office of Inspector General, the United States Department of Agriculture Risk Management Agency Special Investigations Staff, the Federal Bureau of Investigation, and Internal Revenue Service Criminal Investigation.

Federal officials emphasized that while the overwhelming majority of farmers operate lawfully, coordinated fraud schemes undermine programs designed to stabilize agricultural markets and protect producers from genuine loss.

Authorities described the case as an example of long-term, multi-agency collaboration aimed at protecting federal insurance systems and preserving the integrity of the agricultural sector. The investigation spanned several years and involved extensive financial analysis, production audits, and documentation review across multiple states.

The case is now closed from a sentencing standpoint, though restitution enforcement and post-release supervision will continue for years.

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