Fraud Friday – Cattle Farmer Pleads Guilty to USDA, SBA, & Bankruptcy Fraud
December 15, 2023
Delaney Sexton
Contributing Editor
Fraud Friday – Cattle Farmer Pleads Guilty to USDA, SBA, & Bankruptcy Fraud
An Iowa custom cattle farmer pled guilty to one count of theft of livestock, one count of wire fraud, and one count of false bankruptcy declaration. These are the details of his numerous crimes:
Michael Wayne Butikofer owned a farming operation, “Fawn Hollow”, that functioned as a feeding operation in which employees of the company would raise and care for cattle owned by other individuals and investors. The cattle would then be sold to a Wisconsin slaughterhouse. Under the USDA Packers and Stockyards Act of 1921, Fawn Hollow should have been registered as a “dealer”, but at no time was Butikofer or the cattle operation registered with the USDA as a dealer.
From July 2020 to February 2022, Butikofer would convert the proceeds of sales of cattle owned by six investors for his own use. He convinced the investors to allow him to sell cattle under his name, and he falsely represented to the Wisconsin slaughterhouse that he had the title to the cattle he was selling. Through his actions, he violated the Packers and Stockyards Act of 1921 since the operation should have been registered with the USDA, the operation should have had a dealer bond, and the cattle owners should have received prompt payment from the sale of their cattle.
Also starting in July 2020, Butikofer defrauded the USDA of over $200,000 in emergency assistance funds that were designed to assist livestock producers. Under the Coronavirus Food Assistance Program (CFAP), a qualified cattle producer could receive payment on a per-head basis of the producer’s eligible beef cattle on a specific date. Under another individual’s name, he claimed that the person owned cattle when they did not own any cattle, and when they received CFAP payments, he would intercept or gain access to the funds to use for his own purposes.
In February 2022, Michael Butikofer received a $1.5 million EIDL from the SBA. His application falsely states that all the funds would be used “solely as working capital to alleviate economic injury” caused by the pandemic. After receiving the money, he actually used at least $75,000 to pay an attorney for their services rendered in relation to a Chapter 11 bankruptcy proceeding.
With regard to the bankruptcy proceeding, he submitted a false and fraudulent statement of financial affairs in March 2022. A month later, he falsely testified under oath at a meeting of creditors, and in November 2022, he “repeatedly committed perjury before the bankruptcy court when asked questions about the ownership of his cattle operation.”
In addition to these fraud schemes, he also violated the H-2A program which allows U.S. employers to bring foreign nationals to the United States to fill temporary agricultural jobs as long as the employer met specific regulatory requirements. While on federal pretrial release, he helped recruit workers under false and fraudulent pretenses, representations, and promises. In 2020, a federal district court entered a default judgment against Butikofer for violating the Fair Labor Standards Act and Trafficking Victims Protective Reauthorization Act in 2018.
Lastly, during a detention hearing at the beginning of December, evidence showed that Butikofer made an attempt to tamper with grand jury and trial witnesses.