Kentucky farmer sold $1 million in cattle he was supposed to be using as loan collateral
A Central Kentucky farmer has admitted selling cattle he had pledged as collateral when getting a significant loan and not using the proceeds to pay the loan.
Peter Alex Cox, of Boyle County, pleaded guilty Monday in federal court in Lexington to a charge of unlawful conversion of loan collateral, according to court documents.
Cox obtained a line of credit beginning in 2013 from Central Bank Agricultural Credit Association (Ag Credit) that ultimately increased to just over $1 million.
Most of the credit amount was secured by the Farm Service Agency, which is part of the U.S. Department of Agriculture.
Cox pledged beef and dairy cattle he owned as collateral on the loan.
On May 22, 2019, Cox showed lenders more than 800 cattle he was using as collateral, but between then and Oct. 22, he sold hundreds of cattle under a fake farm name, High Ridge, according to his plea agreement.
His intent was to keep FSA and Ag Credit from getting any notice of the sales or any of the money, his plea agreement said.
Cox also sold the cattle at unauthorized locations to keep buyers from checking with the credit association on whether they were pledged toward a loan.
Cox’s cattle sales totaled more than $1.1 million between May and October 2019, but he didn’t make payments on his loan as required or notify the lender, his plea document said.
Cox agreed to make restitution payments totaling $984,500, with $913,936 to FSA and $70,563 to Ag Credit.
The charge is punishable by up to five years in prison. Chief U.S. District Judge Danny C. Reeves scheduled sentencing in July.
